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Alibaba Pictures Loses $69 Million From Ticket Subsidies

Jack Ma Alibaba
Vianney Le Caer/REX/Shutterstock

Alibaba Pictures Group lost $69.4 million (RMB456 million) in the six months to June as it used subsidies to build the market share of its Tao Piao Piao online ticketing business.

The net loss was substantially larger than the same period last year, when the company only lost $22.7 million (RMB152 million,) and it dwarfed the group’s revenue of $38.5 million (RMB257 million,) despite a ten-fold increase in revenue.

The Hong Kong and Singapore-listed subsidiary of China’s ecommerce giant Alibaba described Tao Piao Piao as ‘the Company’s core operating asset, (which) has emerged as one of the leading players in the fast developing online to offline (O2O) business segment in China.”  Tao Piao Piao now offers online ticketing and seat selection services in more than 5,000 theater complexes, covering 95% of China’s total box office. The platform then links with a number of APG’s other operations, including distribution and marketing.

The investment in market share is partially sustained by outside finance for Tao Piao Piao, which came in from a group of series A investors who invested $254 million (RMB1.7 billion) for a 12.4% stake in May.

APG said that “good progress” had been made in all four business divisions: content production, Internet-based promotion and distribution, entertainment e-commerce, and international operations.

Since last year’s “Mission: Impossible – Rogue Nation,” APG has collaborated with Paramount Pictures on two more projects – “Teenage Mutant Ninja Turtles: Out of the Shadows,” and “Star Trek Beyond.” For both films, APG invests in the projects and provides promotional activities in China. In addition, the APG said that it has partnered with Skydance Media for the production of the film “Flying Tigers.”

“As Alibaba Pictures works to strengthen each of our business segments, it continues to enrich its ecosystem, which remains a key part of its long term strategic goals,” said Zhang Qiang, CEO of APG. “Recently, we have announced investments in selected cinema operators, we are exploring the possibility of using our existing data, internet knowhow and resources to improve the operational efficiency of cinemas. Continuing to discover new business initiatives that can potentially add value to our vertically integrated model continues to be at the forefront of our efforts.”

In the second quarter, Alibaba Group announced that its key media investments, including Youku Tudou, UCWeb and OTT TV were combined into a Digital Media and Entertainment unit that would be under a unified management structure. APG is expected to work more closely with the Digital Media and Entertainment unit, which includes also Alibaba Music, Alibaba Literature and Alibaba Sports, the company said in a statement.