It was a certifiable love-fest, as China’s richest man dusted off his cinephile status during a Q&A session at the WSJD Live conference, telling entertainment industry power brokers that “The Bodyguard,” “Forrest Gump” and “The Godfather” movies rank among his favorites. More important than insight into his Netflix queue was that Ma made it clear he brought his checkbook with him on the trans-Pacific flight.
“I come here to learn. I come here to look for partners,” Ma said.
Despite a slew of meetings and a warchest of $25 billion from Alibaba’s recent public offering, it’s not clear Ma will be signing many checks just yet.
“They’re kicking the tires of the car,” says media analyst Hal Vogel. “It’s not a question of do they have the money. They’re still in the discovery phase of ‘What should we do and how should we do it?’ ”
Movie chiefs and agents were only too happy to lay out the possible ways Ma could go on a spending spree.
The Alibaba chief took a meeting with Paramount CEO Brad Grey and vice-chairman Rob Moore. A sitdown between Ma, Sony Entertainment CEO Michael Lynton and Sony Pictures Entertainment co-chair Amy Pascal resulted in preliminary discussions about a co-financing pact. Ma’s team met with Universal’s top brass, Fox Studio chief Jim Gianopulos, Lionsgate executives and Relativity Media’s leadership. Zhang Qiang, CEO of Alibaba Pictures, was often Ma’s ambassador after the technology baron traveled to the Silicon Valley area to meet with his U.S. staff later in the week.
Left off Ma’s dance card, at least this time, was Warner Bros. CEO Kevin Tsujihara, although the studio chief expects to meet with him at some point. Ma’s team stressed to the executives it met with that not only was Alibaba eager to distribute their films and television programs, but that the company understands the importance of copyright protections. Piracy is a huge issue in China, so these assurances must have resonated.
The American executives who met the Internet entrepreneur came away impressed. One studio chief who met Ma described him as “unassuming, smart, confident — and someone who loves movies.”
Studios weren’t the only ones making a pitch to Ma. CAA’s leaders talked with Alibaba, while WME’s Ari Emanuel and Patrick Whitesell sat down to discuss ways their roster of A-list clients could work with the Chinese e-commerce giant. Emanuel and Whitesell then took the relationship public by hosting Ma courtside at the Lakers’ season-opener at Staples Center.
“That was an obvious signal to the marketplace that ‘I’m an insider, not just a technology company,’ ” says one media and entertainment investor. “It’s about making and building relationships.”
What Alibaba wants is content for its set-top boxes, and as the box office success of “Iron Man 3” and “Transformers: Age of Extinction” demonstrates, China has a great appetite for Hollywood movies. Alibaba already has signed licensing deals with Lionsgate, and Ma and his lieutenant are eager to lock up distribution pacts for movies and shows, and to hammer out licensing pacts for his company’s streaming service.
“We have a vast distribution network of approximately 300 million users, with 100 million people coming to our sites every day,” says Robert Christie, a spokesman for Alibaba. “Providing an outstanding customer experience is one of our
primary objectives for 2015, and providing quality content is one way to achieve that goal.”
Hollywood has had a delicate relationship with China for years, but there are indications that things are improving.
In the past, many executives traveled to the country, with high hopes that they could break into its market of 1.4 billion people and access its rivers of cash, only to end those expeditions empty-handed. However, several recent flirtations have been consummated — Jeff Robinov’s Studio 8, for instance, secured backing from China’s Fosun Group; and Robert Simonds’ new studio is being partly supported by Hony Capital. In the case of Alibaba, its public status and burgeoning network of customers and services shows a clear opportunity.
“One of the holy grails for the movie business has been, ‘How do you get into China, ’” says Tony Wible, an analyst with Janney Montgomery Scott. “It’s a difficult market to (crack), but finding a partner like (Alibaba) might be an ideal way to go about it.”
The recent whirlwind tour was seen as mostly a fact-finding mission for Ma, and insiders expect that any deals that come out of it will be co-productions or joint ventures. That said, should Alibaba want to lay down roots, it has the financial heft to buy a studio.
Ma speaks English fluently and understands the cultural currency that Hollywood boasts. His biggest obstacle to attaining a fruitful relationship may be his own country: China’s strict censors could wreak havoc on any deep investment in the entertainment business he might want to make here.
“Doors are wide open to him anywhere in Hollywood, because he’s got a bankroll. But he’s got a dilemma,” Vogel says. “He’s got the right idea about what his customers and viewers want, and he has an understanding of American culture. But he doesn’t have a free hand, because of the Chinese government.”
Some things money can’t buy.