Due to acquisitions and a deal with Paramount for Tom Cruise Mission Impossible, Alibaba Pictures Group steered last year by reporting a full year profit.
Alibaba Group Holding is very much interested in expanding its business in the media industry. It is not only investing to improve and bolster its media division but it is also making deals and acquisitions that would further help in growing in this domain. In March 2014, Alibaba acquired almost 60% stakes in ChinaVision, valued at $805 million. After acquiring, it registered it as a film company next month, which was first named Alibaba Films Group and then changed it to Alibaba Pictures Group in the later month.
Alibaba Group was quite confident of its Alibaba Pictures and wanted to come up with the best. Alibaba Pictures was boosted by the financial gains from a stock offering which helped the Films Group to end its year on a high. It might be a tough start in the beginning but with time, the film subsidiary did quite well in 2015. The Beijing based studio, which is also the film subsidiary of Jack Ma’s online retailing giant managed to post a full year profit of $71.7 million (RMB 466 million).
The result is a massive improvement as Alibaba Pictures Group reported a full year loss of $64.1 million in 2014, which was its first year in the industry. The decision to invest in Paramount’s Mission Impossible: Rogue Nation, which features one of the biggest Hollywood stars Tom Cruise, was brilliant. The movie brought in nearly $10.6 million in revenues for this year and increased the overall subsidiary’s profits by $1.1 million with this movie alone.
Alibaba Pictures Group (also known as APG) noticed the widening of its operating loss last year as well but one-time gains that also include share issuance with net proceeds of $1.5 billion (HK$ 12.1 billion) eventually helped in reporting full year profit. The acquisitions also helped APG to raise revenues, which were $40.6 million in 2015. Last year’s revenues were a year over year increase by 108.3%.
Yueke, which was acquired by APG for $134 million, is one of the biggest suppliers of cinema tickets to the viewers in China, which also majorly helped the company to raise such high revenues. APG gave credit to Yueke in an announcement, which contributed in much of its revenues.
The officials said that Yueke has proved to be an asset for the APG and they expect the acquisition to continue being a strong revenue generator in the times to come. China’s national box office is massively growing considering the situation and has expanded over 50% in just the first two months of 2016. Hence, the positive growth strategy would be key for Yueke and APG to improve revenue gains.
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