Alibaba Pictures’ losses narrow as marketing expenses are trimmed

Alibaba Pictures reported on Tuesday that it booked RMB 3 billion (USD 433.8 million) in total revenue in the 12 months ended March 31, 2019, increasing 9% year-on-year.

Internet-based film promotion and distribution, which is the company’s core business, raked in RMB 2.5 billion, up from the previous year’s RMB 2.2 billion.

Alibaba Pictures is the parent company of Tao Piao Piao, which is one of the largest ticketing and film review platforms in China. Tao Piao Piao generated RMB 1.2 billion in revenue in the year.

The company also operates Yunzhi, which provides 3,500 cinemas in China with cloud-based retail solutions. Yunzhi pulled in RMB 333.7 million for Alibaba Pictures, slightly lower than the previous year’s RMB 346.6 million. Yunzhi announced in April that it plans to supply 100 showrooms, 100 cashier-less supermarkets, and 100 automated vending machines to cinemas in China.

In addition to its consumer-facing ticketing service and digital management platform for cinemas, Alibaba Pictures has already served 171 film projects and 295 companies with its digital promotion and distribution platform, Beacon. The platform runs ads and sponsored content via 82 partners and 810,000 social media accounts. It also releases reports on China’s film industry, covering box office data, screenings, and attendance statistics.

Beacon’s ads placement and Alibaba Pictures’ investment in films, like that in the Academy Award-winning Green Book, generated RMB 961.5 million, a boost from the previous year’s RMB 819.8 million. Alibaba Pictures also invested in Mission: Impossible – Fallout and co-produced the Chinese science fiction film The Wandering Earth.

While there were no drastic changes in Alibaba Pictures’ core business, its annual net losses amounted to RMB 254 million, significantly shrinking from the previous year’s RMB 1.2 billion in net losses, mainly due to decreased expenses.

The company’s selling and marketing expenses amounted to RMB 1.6 billion, representing a year-over-year decrease of 38%, which Alibaba Pictures attributes to “higher overall operating efficiency.” However, the expenditure in this category in the 15 months ended March 31, 2018, amounted to RMB 3.2 billion, with the increase primarily meant for Tao Piao Piao’s marketing as the platform angled for the top spot among China’s ticketing platforms.

Alibaba Pictures is 51% indirectly held by Alibaba Group Holding Limited.

Contact the writer at jingli@kr-asia.com