Alibaba's Film Subsidiary Is Losing A Lot Of Money
In an article published Tuesday, Variety's Asian Bureau Chief Patrick Frater reported that Alibaba Group Holding Ltd (NYSE: BABA) has seen its film studio record losses of $53.5 million in 2014, compared with a profit of $24 million prior to its takeover by Alibaba.
Alibaba bought a majority stake of the film studio that previously operated under the name Chinavision and brought in a new management team.
Film revenues for 2014 came from minority equity stakes in films including Peter Chan's "Dearest" and Ning Hao's "Breakup Buddies" and from TV series "Bayonet Heroes."
"Alibaba Group has commenced synergistic coordination with [Alibaba Pictures'] cultural, film and television entertainment-related resources and businesses, and has defined the [Alibaba Pictures] as the flagship unit of Alibaba Group's entertainment business," the company said in regulatory filing that was picked up by Variety.
"[Alibaba Pictures] and Alibaba Group have commenced resource integration, and have explored a user-demand-oriented e-commerce customization model through the Internet and big data, in addition to developing a cross-industry in-depth cooperation model for e-commerce and cultural and creative industry by taking advantage of the deployment of O2O (online to offline) film related business in ways such as conducting promotion and marketing activities on Alibaba Group's e-commerce platforms."
Shares of Alibaba traded recently at $82.81, down 0.5 percent.
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