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Chinese e-commerce giant Alibaba announced a 54% increase in revenue for the third quarter of its financial year, with the group total hitting $7.67 billion. But overall losses in entertainment deepened, even as the group’s revenue stream from media and entertainment nearly tripled to $585 million.

Net income for Alibaba was up 38% at $2.47 billion, with adjusted EBITDA of $3.89 billion, an increase of 41%. That gave earnings per share above market expectations at $1 per share or non-GAAP EPS of $1.30. Analysts had expected Alibaba to report non-GAAP quarterly earnings of $1.23 per share.

The post-Christmas, pre-Chinese New Year period has been a busy one for Alibaba. In late December, the company said it would invest some $7.2 billion in the entertainment sector. That funding pledge followed an executive purge in December at movie-making arm Alibaba Pictures. Yu Yongfu, a financial and technical executive who has had a meteoric rise since joining Alibaba in 2014, was named Alibaba Pictures chairman and CEO.

While digital entertainment revenues grew, the third financial quarter results also show the division as the biggest loss-maker in the group. Losses in the October-December quarter grew to $463 million (RMB3.20 billion), up from $156 million (RMB1.09 billion) in the same period a year earlier.

In its official statement, Alibaba said that consolidation of its media and entertainment businesses had created synergies within the segment and with other parts of the group. “For instance, Youku Tudou participated in the 11.11 Global Shopping Festival for the first time and showcased live-streaming of the Countdown Gala Celebration to millions of users on the Youku Tudou app.”

The statement added: “We maintained our competitive position in digital entertainment in China through a combination of licensed premium content as well as self-produced and joint-produced programming, achieving synergies across our entertainment platform on both mobile and living room screens.”

Speaking later to investors on a conference call, Alibaba finance director Maggie Wu said: “We will continue to invest in content, customer acquisition and infrastructure in digital media and entertainment.. and by the fiscal year end we expect to narrow the segment’s negative EBITDA margin narrow.” Answering analysts’ questions she said that integration of Youku Tudou and growth in average revenue per user (ARPU) are forecast to grow for the sector through 2017. “But investment won’t be held back.”

Earlier on the call group CEO, Daniel Zhang explained the growing importance of digital media and entertainment. “We are integrating film, music and sports. We are excited by our integrated approach between entertainment and commerce, which is making shopping fun and entertainment affordable,” said Zhang.”Entertainment and interactivity are part of the consumer experience. We are also using our data resources to create personalized experiences.”

At the World Economic Forum in Davos last week, Alibaba executive chairman Jack Ma announced a long-term deal with the International Olympic Committee that will see the company provide cloud computing and technical services to the Olympic Channel and launch a dedicated e-commerce platform for the Games. Ma was one of the first foreign business leaders to meet Donald Trump after the presidential election and promised to support the creation of a million jobs in the U.S.

This month, Alibaba also agreed to pay $2.6 million for Chinese department stores group Intime, moving into an offline sector that, as an online retailer, Alibaba has shaken up through its combination of technology, ubiquity and financial muscle.

Alibaba shares are traded in ADR form on the New York Stock Exchange. They closed at $98.41, up 2.5% on Monday. Pre-market trading in New York on Tuesday morning pointed to a further rise of over 5%.

More to follow.