China's Alibaba to Cooperate with Producer Enlight Media on Slate of Movies, OTT Projects

Jack Ma Alibaba - H 2014
AP Images

Jack Ma Alibaba - H 2014

E-commerce giant Alibaba is Enlight Media's second biggest shareholder.

Amid growing speculation about Alibaba's strategy in the entertainment business, Enlight Media, one of China's leading private film companies, has signed a framework deal with the e-commerce giant to broaden cooperation on film production and online services.

In an announcement to the Shenzhen Stock Exchange, Enlight said it would invest in five films produced by Alibaba, which is currently trying to boost its flagging entertainment unit Alibaba Pictures, with each investment up to five percent.

Alibaba, which bought an 8.8-percent stake in Enlight Media for $380 million in March, would similarly invest in five Enlight projects, again taking no less than a 5-percent stake in each film.

Over the next three years, Enlight Media and Alibaba Pictures will co-produce five films together, although the statement said that figure was provisional.

The priority in the cooperation would be scripts, music and adaptation, Enlight said in the statement.

Enlight Media will also cooperate exclusively with Alibaba on an over-the-top (OTT) video service, and plans to open a retail outlet that would sell film-related and celebrity merchandise.

Earlier this week, Alibaba announced it would further the efforts to boost its loss-making movie unit by naming Alibaba Pictures chairman Shao Xiaofeng CEO of Enlight.

Founder and executive chairman Jack Ma has ambitions to become a major player internationally and described Alibaba as "the biggest entertainment company in the world," but its movie unit has struggled to find its feet since its purchase in June last year. Alibaba Pictures notched up a $54 million net loss in 2014.

The co-produced films would have priority status for sale on Alibaba's Taobao Movie online ticketing business, and Alibaba would promote the film using Taobao's resources.

Last month, Alibaba said that it would incorporate its Taobao ticketing business and its Yulebao production crowdfunding platform into Alibaba Pictures as it tries to stem losses at the group.

Entrance tickets and O2O business for Enlight Media's entertainment theme park would also sell tickets on the Taobao platform.

Enlight, which last year picked up Israeli production firm Keshet's Rising Star format, has a strong track record with domestic productions and has made no secret of its international ambitions, including its Hollywood expansion.

The group was founded by Wang Changtian, who is currently president of the group.

Enlight Media has a strong domestic base. In 2012, its low-budget comedy Lost in Thailand took $202 million here. Last year, Enlight said it would make 32 movies in the period by May 2017, investing a total of $550 million.

Alibaba spent over $3 billion in the entertainment industry last year, and the cash-rich company went window-shopping for content and even potential acquisitions in Hollywood last year, but has yet to make a major move there.

In August, Alibaba and Ma’s Yunfeng Capital bought a $1.2 billion stake in online video website Youku Tudou.

The group is involved in a slate of films to be produced by Hong Kong filmmaker Wong Kar-wai, including Bai Du Ren, which will be directed by the novelist Zhang Jiajia and feature Tony Leung as the lead actor.

Meanwhile, share trading in Hunan TV & Broadcast, with which Lionsgate recently signed a major cooperation deal, has been halted on the Shenzhen Stock Exchange since Wednesday, May 27.

Lionsgate last year partnered with Chinese e-commerce giant Alibaba to launch a streaming service in China to distribute titles like Divergent and The Twilight Saga: Eclipse, and TV shows like Mad Men, Weeds and The Royals.

News trading had halted prompted speculation that Alibaba was keen to buy a stake, similar to rumors earlier in the week when Wanda Cinema Lines stock trading was halted.