Alibaba offshoot buys stake in Spielberg company

The film offshoot of e-commerce giant Alibaba Group has purchased a minority stake in Amblin Partners, a production outfit backed by Steven Spielberg, the latest in a string of investments by Chinese companies to use Hollywood moviemaking magic to fulfill their global ambitions.

The investment is part of a comprehensive strategic partnership agreement Alibaba Pictures Group inked with Amblin Partners in Beijing on Oct 9, as the internet film company builds its capacity in film production and content creation.

Zhang Wei, president of Alibaba Pictures, says the Hong Kong-listed company aspires to become a studio that can produce content not only for the China market, but also for worldwide audiences. "That (goal) requires good skill in storytelling and Steven Spielberg is definitely the best of the best," she says.

The deal with Amblin Partners marks Alibaba Pictures' most comprehensive partnership deal to date, with agreement to work together on production, marketing and distribution globally and in China, and its first investment in Hollywood.

Neither of the two sides has revealed the specific financial terms of the deal, but Alibaba Pictures will get to name a representative on Amblin Partners' board.

The deal between Alibaba Pictures and Los Angeles-based Amblin Partners is the latest among the spree of deals made in the past two years that intend to help Hollywood movies better access the Chinese market, which is on track to become the world's largest, and Chinese companies to produce movies that have global influence.

Chen Shaofeng, deputy dean of Peking University's Institute for Cultural Industries, says the rising trend of China-Hollywood cooperation is based on mutual interest. "Chinese companies and Hollywood filmmakers need each other," he says.

Among Chinese companies, China's richest man Wang Jianlin's Dalian Wanda Group is the most aggressive one in terms of buying up Hollywood assets. This year, it bought a controlling stake in Jurassic World co-producer Legendary Entertainment for $3.5 billion and is said to be eyeing Golden Globes show-runner Dick Clark Productions.

The acquisition spree has raised concern in Washington, with lawmakers calling for greater scrutiny of Chinese investment in the US media industry.

Globalization is one of Alibaba Pictures' top priorities but the company wants to take adifferent approach from Wanda. "With our platform-oriented approach, we have a mentality that can bring value to people rather than taking away value away from people. You don't see us coming to buy up Hollywood, buying up lots of assets," Zhang says.

Huang Guofeng, an analyst with Beijing-based consultancy Analysis, says Alibaba Pictures' approach has more chance to be passed in the US rather than high-profile takeovers. "Setting up joint ventures in overseas markets could be another option when Chinese entertainment firms get more overseas experience," he adds.

Contact the writers at mengjing@chinadaily.com.cn and edzhang@chinadaily.com.cn

Chinese investment in Hollywood in 2016

August: Chinese tech giant Tencent and PCCW, a Hong Kong telecom and media company, get involved in a new financing round for Bob Simonds' film and TV studio named STX Entertainment.

August: Russo Brothers form a production venture with China's Huayi Brothers media group.

June: Tencent joins Los Angeles-based Tang Media Partners in establishing of a new TV production joint venture with IM Global, a Hollywood film financier and sales agency. China Media Capital and the Huayi Brothers media group are also involved in the deal.

June: Tencent partners with Hollywood power agency WME-IMG and Sequoia Capital China to create a new China joint venture, WME-IMG China.

January: Wanda Group buys a controlling stake in Legendary Entertainment, the producer of the Godzilla and Jurassic World movies, for $3.5 billion.

(China Daily Africa Weekly 10/14/2016 page28)