In the second of our four-part series on the rise of Alibaba Pictures, we take a look how this dynamic new business plans to create entertainment tailored for China’s increasingly sophisticated audiences.
Give the people what they want.
That’s one way to describe the goal of Alibaba Pictures, the new film and TV production arm of China’s e-commerce giant, Alibaba Group. Launched in 2014 following the purchase of a controlling stake in a Hong Kong-based studio, Alibaba Pictures has its sights set on creating customized content for Chinese audiences that are lapping up filmed entertainment in record numbers.
The trick, of course, is identifying what those people want.
China is a prime international growth market for movies. Last year, mainland moviegoers spent $6.78 billion at the box office, shattering the previous year’s record of $4.8 billion by a whopping 48.7%. That trend is driven by an expanding middle class with more disposable income coupled with a building boom in new movie theaters. By one estimate, China is adding 30 new screens per day.
Like other properties in Jack’s Ma’s digital empire, Alibaba Pictures has grand ambitions for global expansion. Plans call for creating original film and TV content or collaborating with other media partners, both domestically and internationally. The company will also look to acquire the rights to distribute foreign films in China.
At Alibaba Pictures’ new Beijing headquarters, company executives are exploring an inspired approach to content development by leveraging the Alibaba Group’s vast repository of big data on consumer behavior and demographics. China’s largest e-commerce company can tap data streams that cover more than 800 million online shoppers and other users across its China marketplaces and affiliated Internet companies.
One potential source is Youku Tudou, a market-leading online video site that Alibaba agreed to purchase in November. Once completed, the acquisition is expected to give Alibaba the ability to reach Youku Tudou’s 500 million strong existing users. Another is Taobao Movies, the online ticketing business acquired by Alibaba Pictures from Alibaba Group in December along with Yulebao, a type of crowdfunding platform for movies and other entertainment content.
Such businesses can provide insights into the content audiences are interested in, helping film producers spot shifting trends and—the company hopes—putting a little science into the serendipity that’s often needed to discover the next blockbuster or movie-franchise tentpole.
“We have hundreds of millions of users and they are actually the core of the movie audience in China,” Alibaba Pictures president Zhang Wei told The Hollywood Reporter. “Underneath our platforms, it’s the same database. People who come to Taobao Movies to buy tickets are already Alipay users (Alibaba’s third-party online payment platform). This gives us a wealth of consumer data on our ticket buyers.”
Of course predicting what will click with audiences is a notoriously inexact science. While Alibaba Pictures’ thinks it can use data to help refine and guide content development, the company is not discounting the roles that traditional intuition, artistry and creativity play in the process.
“Films are greenlit years before they hit the screen,” says Alex Zhang, secretary general of the international division of Alibaba Pictures. “While it’s our intention to inform and inspire ourselves through creative harnessing of consumer data, the final decision to make a movie is really a commitment to nurturing an idea we think ought to exist in a big way. We respect the importance of innovation—to be predictive, not prescriptive.”
Last year, seven of the 10 highest-grossing movies in China were Chinese made, with Monster Hunt, a 3D live action/animated feature based loosely on Chinese literature, occupying the top spot. It sold $391 million in tickets. Alex Zhang (no relation to Zhang Wei) suggests this phenomenon of homegrown winners is driven by the desire of middle-class consumers to see more of their cultural heritage reflected back on screen and the improvement in the overall quality of Chinese-made films.
“The motion-picture medium has really grown to supplant written content as the dominant medium of information and entertainment consumption,” he says. “With the improvements in domestic Chinese production facilities, audiences have acquired a newfound belief that China’s domestic output can really deliver the kind of elevated experience traditionally only expected from Hollywood tentpoles.”
While Alibaba Pictures’ data-driven strategy continues to take shape, the cameras have begun to roll. The company’s first live-action film, The Ferryman, a comedy from renowned Hong Kong auteur Wong Kar Wai and starring popular actor Tony Leung, began shooting in mid-2015 and is scheduled for release later this year. Alibaba also was co-producer and distributor for Little Door Gods, a 3-D animated feature from Beijing-based studio Light Chaser Animation that debuted Jan. 1.
Beyond China’s borders, Alibaba Pictures is making moves to become a global player by investing in regional film projects. In October, the company announced it had financed the Korean star-driven action film, Real. The deal not only sets a stake in the ground of Korea’s highly lucrative film industry for future projects, it also provides Alibaba Pictures with sole distribution rights in China, where films starring Real’s male lead, Kim Soohyun, have traditionally done well.
Alibaba Pictures is also eyeing Hollywood. Or is Hollywood eyeing Alibaba Pictures? In her new role as company president, Zhang Wei is focusing on building relationships with Tinseltown studios to find opportunities for co-producing English language movies with built-in appeal to Chinese audiences. With U.S. box office revenue relatively flat over the past six years—even with record-setting hits like Star Wars: The Force Awakens boosting 2015 box office receipts to new heights—the Chinese market holds tremendous potential for both sides. Indeed, the No. 2 film in China in 2015 was Universal’s Furious 7, which drew $379 million in ticket sales, outpacing its U.S. performance.
“Hollywood still encompasses the most mature and vital film industry in the world,” says Alex Zhang. “It aggregates some of the greatest filmmaking talent of our time. But what Alibaba Pictures can offer Hollywood in return is its unparalleled proximity to its vast consumer database.”
In the next part of this series, we’ll take a closer look at Alibaba Pictures’ marketing and distribution efforts.