Latest Alibaba news is about the company proposing the asset injection into the unprofitable movie arm of it which means getting shares in the mounting entertainment business. Alibaba Pictures which is Hong Kong listed expressed that the parent company, Alibaba Group proposed to make the online movie ticketing business a folding into it and also the crowdfunding businesses which are movie production based.
Alibaba Pictures shares that are Hong Kong traded had been halted March 24 have been raised by 37% the time they were resumed on Wednesday last week. The announcement by Chinese e-commerce giant does not include the specific business units that are going to be discussed for the asset injection. But Alibaba news reports that the businesses are most likely to be Taobao Movie which is a ticketing website by Alibaba and Yule Bao which is a platform providing the ability for the Chinese investors to invest in the movies. These services had been launched by the parent company, Alibaba Group Holding last year. The integration according to the e-commerce giant is going to be a powerful one since it incorporates the e-commerce due to the huge base of users and also on the other side is the production subsidiary. The new business model will be created if the injection that has been proposed is carried out. The business model will be for the filmmaking companies that traditionally the companies in China lack.
If this integration is carried out successfully then it will boost the Alibaba Group’s presence and monetization in the entertainment industry which is surrounded with problems for now. Alibaba Pictures had come into being at the time when 60% of the stake was bought by Alibaba Group in China Vision Media Group which is a native movie studio.
The deal is beneficial due to the fact that it incorporates the financial arm of the movie to the ticket sales operations that generate revenue. But this won’t make a significant difference to the online businesses of the parent company.
“Integrating these two businesses complements Alibaba Pictures’ existing lines of business and helps realize Alibaba Group’s vision of making digital media entertainment available to our customers anywhere anytime,” says Alibaba in an email.
The binding offer has not been put by the parent company though, at this point. There are no agreements that have been reached by the companies and no terms on the table yet. In order for the users to keep using their platforms, Alibaba and its rivals have enhancing their businesses by entering the entertainment business as well.