China's Alibaba Pictures Posts Lower First-Half Loss
The troubled moviemaking unit of the Chinese e-commerce giant halved its losses from a year ago, as it continues to restructure.
Alibaba Pictures, the film unit of Chinese e-commerce giant Alibaba, reported a loss of about $24.0 million (¥151.8 million) for the first half of 2015, roughly half of the $53.6 million that the company lost over the same period a year earlier.
Several months before its historic IPO on the New York Stock exchange in September, Alibaba Group acquired a 60 percent stake in ChinaVision Media Group, a Hong Kong-based content producer involved in film, TV and sports, for $805 million. The acquisition was accompanied by a name change of the business to Alibaba Pictures, along with a flurry of other deals, as Alibaba spent some $3 billion in a major push into the entertainment sector.
The company hit a rough patch, however, when financial irregularities were caught in statements issued before the buyout, relating to tax and value-added tax claims over the purchase of artworks and TV copyrights, as well as certain TV drama production costs.
As the accounting problems were resolved, Alibaba Pictures bolstered its war chest in June with an offering of 4.2 billion shares, raising some $1.57 to invest in growth initiatives. In July, the company's ups and downs continued when Patrick Liu, president of Alibaba's digital entertainment unit, was detained over allegations of fraud related to his time as head of Tencent Holdings' video division. In August, the company appointed Zhang Wei, head of its L.A. office, as president of its film unit as the group continued to try to bring its entertainment business into line.
The company said that the loss in the first half of the year reflected continued restructuring and the fact that most of its projects were in the investment stage at the time of reporting, meaning they didn't contribute revenue.
Alibaba Pictures is involved in a slate of films to be produced by Hong Kong filmmaker Wong Kar-wai, including Ferryman, which will be directed by novelist Zhang Jiajia and star Tony Leung. The company also is financing Three Lives Three Worlds, Ten Miles of Peach Blossoms, starring Liu Yifei and to be directed by Zhang Yibai. Television productions also are underway.