China's Alibaba Pictures Reports $139M Loss for 2016
The company said the losses were caused by heavy marketing for its mobile ticketing platform.
Alibaba Pictures, the filmmaking arm of Jack Ma's e-commerce giant Alibaba Group, reported a widely anticipated net loss of $139 million in 2016. The company attributed the losses to heavy marketing costs for Tao Piao Piao, its mobile ticketing business.
In a regulatory filing posted Thursday, Alibaba Pictures posted a net loss of 958.6 million yuan ($139 million), compared with a 466 million yuan net profit in 2015, as marketing expenses climbed to 1.1 billion yuan ($159.5 million).
Revenue soared 243 percent to 904.6 million yuan ($131.2), however, up from 263.7 million yuan last year.
Alibaba described Tao Piao Piao as a "key operating asset," estimating that nearly 80 percent of all movie tickets sold in China are purchased through online platforms. Alibaba Pictures raised 1.7 billion yuan in new funding for Tao Diao Piao from strategic investors last May.
Alibaba Pictures also saw an increase in losses from its content production business, as several 2016 releases failed to meet expectations at the box office. Last year's output included romance film Soul Mate ($24.2 million) and See You Tomorrow ($69.3 million), the studio's first film fully developed and produced internally. The company also held stakes and served as a local marketing partner on Paramount's Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond.
In 2016, Alibaba Pictures took a strategic minority stake in Steven Spielberg's Amblin Entertainment. Their first collaboration together was the China release of A Dog's Purpose earlier this month — so far, the film has earned a healthy $86.4 million, well above the $63.5 million it pulled in from North America.