Alibaba Pictures Posts Another Loss in 2017

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Alibaba Group Executive Chairman Jack Ma

The film and TV production division of Jack Ma's movie studio reported its first modest full-year profit of $650,000 though.

Surging revenue and a small profit at its content production division weren't enough to save Alibaba Pictures Group from reporting a $150 million (950.3 million yuan) loss, attributable to the owners of the company, for 2017.

The result, reported Wednesday, marked a narrow improvement from the 958.6 million yuan loss at the Chinese film studio a year ago. When looking at the company's overall loss, including non-controlling interests, it widened from 976.1 million yuan to 1.05 billion yuan ($166 million).

Alibaba Pictures, a separately listed subsidiary of Jack Ma's e-commerce giant Alibaba Group, saw revenue jump 162 percent to 2.37 billion yuan ($375 million) in 2017.

The bulk of the growth was driven by the company's internet-based film promotion and distribution arm, where revenue soared 189 percent to 1.97 billion yuan. The key asset in that division is Tiao Piao Piao, Alibaba's flagship online ticketing service, which was transferred from the parent company to the film studio in 2015.

Alibaba Pictures has spent heavily on promotions to secure market share for the ticketing platform, which has begun to show signs of paying off. The film promotion and distribution segment's loss narrowed to 351.4 million yuan last year from 607.4 million yuan in 2016.

Online ticketing accounts for some 82 percent of all movie tickets sold in China, Alibaba said in its earnings statement."Tao Piao Piao has become a powerful tool for digital promotion of entertainment content," the company added, noting that it increased its equity stake in the service by 9.12 percent to 96.71 percent in July 2017. Alibaba Pictures noted that Tao Piao Piao was an official marketing partner on a number of international hits in the Chinese box office in 2017, including Indian blockbuster Dangal ($193 million), Christopher Nolan's Dunkirk ($60 million) and A Dog’s Purpose ($88 million), produced by Amblin Entertainment, in which Alibaba holds a stake.

Alibaba Pictures’ content segment, which includes its film and television production operations, earned its first-ever profit of 4.1 million yuan ($650,000) in 2017, up from losses of 243.5 million the previous year. Alibaba Pictures releases in 2017 included Mr. Pride vs. Miss Prejudice ($18 million) and Once Upon a Time ($82 million). TV output included the internet hit Ugly Girl Hai Ru Hua, which was streamed by Youku, owned by the Alibaba parent company.

“Having invested strategically to build the foundations of its entertainment ecosystem over the past few years, the [Alibaba Group] experienced material business progress in 2017,” the company said, noting that it would seek more strategic cooperation with the parent company's vast online ecosystem.

"The collaboration will not be limited to Alibaba Group’s media and digital entertainment matrix, but also extend to its e-commerce platforms, and also Ant Financial Services, said the studio's CEO Fan Luyuan, who assumed his position in August. "All of these platforms have established large user bases, who have an increasing demand for media and entertainment content."