Spielberg Goes Global: Why Amblin's Pact With China's Alibaba Is a B.F.D.

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Jack Ma's Alibaba Group, which announced its minority equity stake in the director's production company at a Oct. 9 signing ceremony in Beijing, will help market 'The BFG' when it releases overseas Oct. 14.

Steven Spielberg has found a kindred spirit in Alibaba Group founder and executive chairman Jack Ma. At the Oct. 9 signing ceremony in Beijing that saw Alibaba Pictures take a minority equity stake in Spielberg's Amblin Partners, China's second-richest man recalled how he always has loved the director's more sentimental work, especially relating to E.T., who "looked like an alien and was also kind."

The "comprehensive strategic partnership" is Amblin's first in China, and Alibaba joins India's Reliance, Canada's eOne and Jeff Skoll's Participant Media as equity holders in the company founded in December as Spielberg's DreamWorks winds down. Amblin's bold move into the world's second-largest movie market gives it not just a way to circumvent China's foreign-movie quota with co-production and co-financing deals but also an opportunity to piggyback on Alibaba's unrivaled online and mobile ecosystem for distribution, marketing and merchandising in the Middle Kingdom. First up: the Spielberg-directed The BFG, which underwhelmed with $55.5 million at the U.S. box office.

"It's good for Spielberg/Amblin as they gain enormous reach into the Chinese consumer market," says MKM Partners analyst Rob Sanderson. "There is potential well beyond cinema distribution and film financing," such as the ability to sell merchandise through Alibaba's marketplaces and release digitally through its social media assets.

Alibaba Pictures has invested aggressively in Hollywood tentpoles in its two-year history, backing Paramount's Star Trek Beyond, Mission: Impossible — Rogue Nation and Teenage Mutant Ninja Turtles: Out of the Shadows. But Sanderson believes this new deal is more significant because it gives the studio "exclusive distribution of high-end Hollywood content" and comes with Spielberg's "elite pedigree."

"Alibaba management believes the Chinese consumer has been tremendously underserviced for entertainment options," he adds. "There is a lot of runway to just catch up to what other economies and cultures allocate to entertainment." 

This story first appeared in the Oct. 21 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.