Alibaba Signs Cooperation Deal With Its Film Arm

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Yu Yongfu, CEO of Alibaba Digital Media and Entertainment Group

Alibaba Pictures Group, Jack Ma's growing film studio, has struck a three-year strategic cooperation agreement with its parent company, e-commerce giant Alibaba.

Chinese billionaire Jack Ma is tightening the links between his entertainment assets.

Alibaba Pictures Group, Ma's growing film studio, has struck a three-year strategic cooperation deal with its parent company, e-commerce giant Alibaba. 

The tie-up is expected to pool resources and strengthen the group's overall entertainment output. Under the terms of the agreement, APG gets first dibs on all rights flowing from Alibaba's content businesses, including Alibaba Gaming, Alibaba Literature and streaming video giant Youku Tudou. Youku, meanwhile, gets priority investment and distribution positions in APG film output — a lift for its ongoing competition against streaming rivals iQiyi and Tencent Video. The units will also collaborate on the operation of an artist management company and the cross-marketing and distribution of group content.

While Alibaba holds a majority position in Alibaba Pictures Group, the film studio has a separate stock market listing in both Hong Kong and Singapore.

The announcement was made by Alibaba Pictures' new CEO Yu Yongfu in a letter to employees.

Read Yu's letter in full below. 

Dear all,

Since the second half of 2016, we have accelerated the ability enhancement of Alibaba Pictures while reinforcing our business foundation. Today, I would like to share with you several important points of progress:

 First, through a focus on business, Alibaba Pictures has achieved a win-win strategic cooperation with Alibaba Digital Media and Entertainment Group, which arrangements include:

1) The two parties will have in-depth cooperation on the related rights of the film and television content that each party possesses. For content development, investment, production and distribution, Alibaba Pictures will be given priority for those copyrights that Youku, Alibaba Literature and Alibaba Games own; for the copyrights which it owns, Alibaba Pictures will give priority to Youku Tudou Inc. for exclusive distribution or investment under the same conditions;

2) Both parties will join hands to promote and distribute film and television content, on the back of the online and offline channels which each party owns in order to promote the brand and work of their own and their collaboration parties. The aim is to create synergy and maximize the branding influence.

3) Artist Management Company will be established through joint venture between Youku Tudou Inc. and Alibaba Pictures, which provides quality talent resources for the cooperation in film and television.

4) Youku, Alibaba Literature and Alibaba Pictures will co-invest in developing online movies.

Second, we will accelerate the development of “One Film Industry”. The team of Heyi Pictures, originally under Youku Tudou, will be consolidated and become part of Alibaba Pictures. The consolidation serves to centralize talent resources and enables business segmentation. With immediate effect, Alibaba Pictures is setting up a domestic film business center and a small committee of the domestic film business center. The committee’s representatives are Yong Fu, Zhang Qiang and Liu Kailuo. The person in charge of Heyi Pictures is Kailuo, who will report to me. Kailuo has extensive hands-on experiences in the film content field. He joined Youku Tudou in 2014 and has been mainly responsible for Heyi Pictures’ film development, production, marketing and distribution. Let’s welcome Kailuo.

With clear strategies and a strong team, Alibaba Pictures will endeavor to grow in terms of professional knowledge, competitive strengths and business ecologies.