×

Alibaba is Able to Withstand Mounting Media Losses as Profits hit $12 Billion

Digital entertainment and media losses at Chinese e-commerce giant Alibaba stretched to $2.35 billion in the financial year running from April 2018 to end of March this year. But the group says it will continue to invest in the sector, and that it can afford to do so.

At group level, Alibaba expanded its revenues by 51% to $56.1 billion (RMB377 billion). Net income expanded by 31% to $12.0 billion (RMB80.2 billion).

Entertainment sector earnings before interest taxes and amortization (EBITA) in the fiscal year 2018-19 was a loss of RMB15.8 billion ($2,35 million), compared to a loss of RMB8.31 billion in fiscal year 2018. The steepening losses were “primarily due to continued investments in licensing rights and the production of original content and an increase in impairment charges on licensed copyrights,” the company said.

Alibaba justified the losses as investment in a growth business that attracts and retains customers. “Digital Media and Entertainment is a key piece of our Live@Alibaba vision and an extension of our strategy to capture consumption beyond our core commerce businesses. In fiscal year 2019, we emphasized developing our original content production capabilities in order to attain greater control over content quality, format and scheduling. We will continue to execute this strategy as we believe original content will drive paying subscriber and advertising revenue growth. Youku’s daily average subscriber base continues to grow at a healthy rate, increasing about 88% and 50% year-over-year during fiscal year 2019 and March 2019 quarter, respectively,” the group said in a regulatory filing.

“In March 2019, we increased our shareholding in Alibaba Pictures to 51% and aligned the management of Digital Media and Entertainment and Alibaba Pictures. Alibaba Pictures is principally engaged in the production, promotion and distribution of theatrical entertainment, serving consumers, studios, and cinema operators. Alibaba Pictures was involved in the production, promotion and distribution of highly popular films, including Chinese box-office hit ‘The Wandering Earth,’ which to-date is the second highest grossing (local) film in China, and the Oscar-winning movie ‘Green Book.’ We believe the alignment of management and content strategy between Alibaba Pictures and our Digital Media and Entertainment businesses will support and enhance our original content strategy in the future.”

In early NYSE trading on Wednesday, following the earnings announcement, Alibaba ADR shares were up 2.5% to $179.46. Its market capitalization at that price is $465 billion.

Popular on Variety

More Biz

  • Barron HiltonBarron Hilton 1990

    Famed Hotelier Barron Hilton Dies at 91

    Barron Hilton, a famed hotelier who helped expand the Hilton Hotels empire and a founding owner of the Chargers NFL football team, has died, the Conrad N. Hilton Foundation announced. He was 91. “Today the world of hospitality mourns for one of the greats. Barron Hilton was an incredible family man, business leader and philanthropist. [...]

  • Patrick Whitesell and Ari Emanuel WME

    Endeavor Targets Sept. 27 for Stock Debut, IPO Video Tells Company's Origin Story

    After years of preparation, Endeavor is set to make its formal Wall Street debut on Sept. 27, when its stock will begin trading on the New York Stock Exchange. Endeavor has targeted Sept. 26 for the final pricing of its shares. The stock will trade publicly the following day. Earlier this week, Endeavor said its [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Charlie Rose Sexual Harassment

    Charlie Rose Sued for Sexual Harassment by Longtime Makeup Artist

    A makeup artist who worked for Charlie Rose for 22 years has filed a sexual harassment lawsuit, accusing the former CBS and PBS host of years of unlawful behavior toward female employees. Gina Riggi alleges that Rose was verbally abusive with her and would often make derogatory comments about her weight. She also alleges that [...]

  • Rob Stringer

    Sony Music Chief Rob Stringer on Sustaining Growth and Recovering From the 'Dark Times'

    The Goldman Sachs Communacopia conference, now in its 28th year, gives top executives at major companies the opportunity to make their case to investors — and the Goldman analysts the opportunity to keep things on the up and up. While the analysts don’t necessarily grill the executives, they don’t lob softball questions either. That was [...]

  • Frank Grillo'Avengers: Endgame' Film Premiere, Arrivals,

    Matt Phelps Tapped as President of Joe Carnahan, Frank Grillo's Warparty

    Frank Grillo and Joe Carnahan’s Warparty productikon banner has appointed Matt Phelps president of the company. Phelps will head the Los Angeles office and be responsible for overseeing all film and television projects. “We searched long and hard to find the right fit for Warparty and felt that Matt embodied everything that we were looking [...]

  • Jack Gilardi, Longtime ICM Partners Agent,

    Jack Gilardi, Longtime ICM Partners Agent, Dies at 88

    Jack Gilardi, a longtime ICM Partners agent who represented such stars as Burt Reynolds, Sylvester Stallone, Jerry Lewis, Charlton Heston and Shirley MacLaine, died Thursday at his home in Los Angeles. He was 88. Gilardi was known for his gentlemanly style, love of the Los Angeles Dodgers and his skill at representing top actors. He [...]

More From Our Brands

Access exclusive content