14 October 2016

Jack Ma to team up with Steven Spielberg

 

Hong Kong Stock Exchange (HKEX)-listed Alibaba Pictures, the film production arm of China’s e-commerce giant Alibaba Group, this week agreed to purchase a minority stake in Steven Spielberg’s Amblin Partners. Under the terms of the transaction, Alibaba Pictures will be represented on Amblin Partners’ board and both companies will collaborate to produce, finance and distribute films.

The strategic alliance will significantly benefit Amblin Partners, which will gain access to Alibaba Group’s vast consumer data, as well as China’s very lucrative film market, whose box office is set to surpass the US, according to the Motion Picture Association of America.  For Alibaba Pictures, Amblin Partners’ film-making expertise is crucial for its planned expansion into the global arena. Commenting on the deal, Alibaba Group’s founder Jack Ma said: “Among Chinese consumers, there is an increasing demand for premium global content,” adding that the deal serves as a cultural bridge between both countries and will have a positive impact on the next generation of Chinese consumers, as reported by Bloomberg.

China’s highly restrictive quota system currently allows only 34 foreign films to be screened in the country annually.  Because of that, Hollywood producers have little say on how their films are distributed in China, making it increasingly important for them to forge partnerships with local companies, according to the Wall Street Journal.

The announcement came as Chinese conglomerate Dalian Wanda has been aggressively snapping up entertainment companies in the US.  Early this year, it acquired Jurassic World producer Legendary Entertainment for about USD 3,500 million. In 2012, Dalian Wanda paid roughly USD 2,600 million to purchase cinema operator AMC Entertainment, which is set to take over Georgia-based Carmike Cinemas for around USD 1,200 million by the end of the year. Dalian Wanda, the world’s largest cinema operator, owned about 13 per cent of all US cinemas as of December 2015, according to the Atlantic. In a move that grabbed media attention recently, the group last month entered into talks to buy Eldridge Industries’ subsidiary Dick Clark Productions (the producer of the Golden Globe Awards), which is reportedly worth about USD 1,000 million.

China’s Hollywood ambitions have worried some in the US. Last month, 16 members of Congress sent a letter to the Government Accountability Office requesting greater scrutiny on Chinese investments in US entertainment assets as they are concerned about China's efforts to censor topics and exert propaganda controls on American media. In response, the government agency has agreed to review the matter. 

Following Alibaba Pictures’ announcement on the HKEX, its shares rose 3 per cent to close at HKD 1.67 on 11th October 2016.

© Zephyr