Alibaba looking for rights to stream Hollywood content

Studios will no doubt be happy to oblige, given the huge appetite for U.S. movies in China

Financial trends and news by Steven Loeb
October 23, 2014
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Chinese e-commerce giant Alibaba has already conquered the public markets inside the United States, launching the biggest initial public offering in history, and now it has a new target: Hollywood.

Alibaba founder, and former CEO, Jack Ma is set to meet with the heads of major Hollywood studios in order to acquire their content for online distribution, according to a report out from Bloomberg on Wednesday.

Among those that Ma will be meeting with will apparently include Lions Gate Entertainment, Walt Disney Co., Paramount Pictures, Warner Bros., Sony Corp. and Universal.

Alibaba has either one of two things one it's mind: either the company is seeking deals that would give it the right to distribute movies and TV shows from American studios back in China at home, or it could also be looking to invest in studio stakes, sources told Bloomberg. It is likely looking for content to sell in China, to consumers, through its set-top boxes, which is already uses to sell goods from it's core e-commerce website.

This would not be the first time that Alibaba invested in digital content. It bought a controlling stake in ChinaVision Media Group for $804 million in March, and then put 6.54 billion Yuan ($1.05 billion) for a 20% stake in Chinese Internet TV company Wasu Media Holding in April. That same month, it paid $1.22 billion for an 18.5% stake in Chinese online video streaming site Youku Tudou.

This would not even be the first time that Alibaba has entered into partnerships with Hollywood: in July, the company teamed up with Lionsgate a subscription streaming service for mainland China that offered titles such as the “Twilight," “The Hunger Games,” “Divergent” and “Mad Men.” 

The company is sitting on a whole lot of cash right now, having raised $25 billion in it's September IPO, making it the biggest company in China. Online content distribution seems like a safe bet to spend some of that money.

Of course, such a deal would not be one sided. Asia, and China in particular, have become increasingly important to Hollywood studios, who have been relying more and more on international revenue.

Have you wondered at all why there are so many superhero movies in the last 10 years? Because its easier to sell action movies overseas (less dialogue and more explosions = less difficult to understand) and it costs less to market a movie starring Batman or Superman, or any other well known character, to a huge international audience.

The Chinese people also love 3D movies, for some reason, hence why studios keep releasing them in the format, even though returns have continuously fallen in the United States.

There's such a gigantic appetite for Hollywood movies in China (sometimes the worst dreck we put out)  that the country  is, essentially, dictating what kinds of movies Hollywood is making right now. Studios are obviously more than happy to cash in. It's a match made in terrible movie heaven. 

VatorNews has reached out to Alibaba for comment on this report. We will update if we learn more.

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