A closer look at Alibaba's HK$5 billion (US$639 million) investment in Hong Kong's culture scene
Alibaba's entertainment arm is investing HK$5 billion (US$639 million) in Hong Kong's cultural scene.
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The backstory: Alibaba, the well-known e-commerce giant, isn't just about online shopping. The company also has its hands in digital entertainment. In 2016, Alibaba Group wanted a bigger role in the world of media and entertainment. So, it formed the Alibaba Digital Media and Entertainment Group. This division oversees platforms like Youku (like a Chinese YouTube), Alibaba Pictures and Alibaba Music. To kickstart its ventures, Alibaba invested US$1.4 billion in new projects, including blending media assets such as Youku Tudou and Alibaba Pictures with gaming, music and other digital ventures.
Last year, Alibaba shook things up with its biggest restructuring in 24 years. It split the business into six different units, each with its own CEO and board. This move gave these units more freedom to do their own thing, like getting independent funding or even going public. Among these was the Digital Media and Entertainment Group, which was responsible for streaming, gaming, and digital content.
More recently: Alibaba's Digital Media and Entertainment Group, which makes up just 2% of the parent company, has expanded quickly. Last quarter, this entertainment segment saw an 18% jump in revenue, bringing in US$710 million. Much of this growth was fueled by Alibaba Pictures, which played a major role in generating over half of China's box office earnings during that period.
The development: Alibaba's entertainment arm is investing HK$5 billion (US$639 million) in Hong Kong's cultural scene in the next five years. It's teaming up with local giants like Television Broadcasts (TVB) and Emperor Motion Pictures for this. This push, called the Hong Kong Cultural and Art Industry Revitalization Program, targets four main areas: TV dramas, films, live performances and talent development.
Alibaba Pictures and platforms like Youku are leading the charge. Alibaba Pictures, for instance, is expanding its presence by opening a new base in Hong Kong and teaming up with Hong Kong Baptist University to support 20 budding filmmakers via scholarships. Meanwhile, Youku is teaming up with TVB to create three new TV dramas.
Key comments:
"Our digital media and entertainment business (such as Youku) brought in a state-owned multimedia entity as a minor strategic investor for a consolidated entity," said Alibaba in its fiscal year report released in July 2022.
"At 24 years of age, Alibaba is welcoming a new opportunity for growth," said Daniel Zhang, Alibaba CEO and chairman, in a statement last year. "The market is the best litmus test and each business group and company can pursue independent fundraising and IPOs when they are ready."
"Our top priority is to reignite the growth of our core businesses, e-commerce and cloud computing," Alibaba co-founder and CEO Eddie Wu said last month.
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