More-than-doubled revenue, better margins, and a tiny maiden profit at its content production arm helped Alibaba Pictures put a brave face on losses that grew to $165 million (RMB1.05 billion) in the 12 months to December 2017.
The separately listed company contains most of Chinese e-commerce giant Alibaba’s interests in the film industry, but excludes Youku, Alibaba’s loss-making streaming video division. Parent company Alibaba recently took a $2.87 billion (RMB18.1 billion) write-down on the value of its holding in Alibaba Pictures.
Alibaba Pictures presented the figures as a second interim series, as it is changing its financial year to March. Revenue was up from $142 million (RMB905 million) in calendar 2016 to $373 million (RMB2.37 billion) in the 12 months to December. Losses deepened from $154 million (RMB976 million).
“Having invested strategically to build the foundations of its entertainment ecosystem over the past few years, the Group experienced material business progress in 2017,” the company said in a statement.
Most of the revenue growth came from Tao Piao Piao, the online ticketing business transferred to Alibaba Pictures from Alibaba in July. It saw revenues nearly triple – to $310 million (RMB1.97 billion) – and losses nearly halved. They dropped to $55.3 million (RMB351 million) in 2017, from $95.6 million (RMB607 million) in 2016.
Online ticketing now represents 82% of cinema ticket sales, Alibaba says. Dominance in that field allows Tao Piao Piao to sell its services in promotion, marketing and distribution, and to describe it as a “social platform” instead of a “ticketing platform.” It participated in the marketing of “The Adventurers,” “Dunkirk” and “A Dog’s Purpose,” a film that was produced by Alibaba Pictures-backed Amblin Partners and scored over $95 million (RMB600 million) at the Chinese box office.
The content segment saw its revenue rise to $53.7 million (RMB341 million) and make a profit of $650,000 (RMB4.1 million) in 2017, a significant improvement from a loss of $38.4 million (RMB244 million) in 2016 on $33.3 million (RMB212 million) of revenue.
Alibaba Pictures titles released in 2017 included “Mr. Pride Vs Miss Prejudice” (which earned RMB124 million, or $19.5 million at the Chinese box office) and “Once Upon a Time” (RMB534 million, or $84.1 million). Films in which Alibaba Pictures had a minority finance position included “This Is Not What I Expected” (RMB210 million, or $33 million) and “Paradox” (RMB523 million or $83.4 million). TV content delivered included “Ugly Girl Hai Ru Hua,” which was released by Youku.
The merchandising and licensing business recorded revenue of $8.58 million (RMB54.5 million) and profit of $4.83 million (RMB30.7 million), up from revenue of $945,000 (RMB6.0 million) and loss of $2.36 million (RMB15.0 million) in 2016.
The company expects to move forward through ever-greater collaboration with Alibaba. “The collaboration will not be limited to Alibaba Group’s media and digital entertainment matrix, but also extend to its e-commerce platforms, and also Ant Financial Services. All of these platforms have established large user bases, who have an increasing demand for media and entertainment content. We are confident and excited about the growth prospects of the industry and [of Alibaba Pictures],” said Fan Luyuan, who took over as CEO in August.
His mission is “building a technology driven infrastructure for improving the efficiency of the industry,” the company said.