Acquisitions and marketing costs push the e-commerce giant’s movie division to a significant loss.
Alibaba Pictures Group, the film studio owned by China’s e-commerce giant Alibaba Group, has posted a net loss of RMB 958.6 million ($139.1 million) for last year in a regulatory filing on Thursday.
The company blamed soaring sales and marketing of RMB 1.1 billion (US$159.6 million) for the expanded loss, which compared with an RMB 466 million net profit in the previous year. The net loss was despite revenue jumping 243 percent to RMB 904.6 million — up RMB 263.7 million from 2015.
Alibaba Pictures’ earnings were largely impacted by increased marketing expenses at its online cinema ticketing business Tao Piaopiao, previously known as Taobao Movies, said the company, which has separate stock market listings in both Hong Kong and Singapore.
Among the 20 major films marketed by Tao Piaopiao in 2016 were Jackie Chan-Johnny Knoxville action comedy Skiptrace, Disney’s The BFG, and local crime comedy Cock And Bull (追凶者也).
Kong Qi, a vice-president of Alibaba Pictures and general manager of Tao Piaopiao was reportedly detained by police in July last year under suspicion for taking bribes amounting to at least RMB 10 million ($1.5 million).
In December, Alibaba Pictures confirmed the reports to China Film Insider but said the incident occurred before Kong took up his position at the company and bore no connection with Alibaba Pictures.
2016 was a year of expansion for the studio as it invested in movie theater operators, film investment companies, and even, in October, announced a partnership with Steven Spielberg’s Amblin Partners to co-produce films for global and Chinese audiences.
Earlier this month, the studio inked a three-year agreement with its parent to share and co-develop content for Alibaba-owned businesses including Youku, the Chinese streaming service.
The company has made a series of investments in films from Paramount including Mission: Impossible – Rogue Nation, Teenage Mutant Ninja Turtles 2, and Star Trek Beyond.
Other movies the studio has invested in include See You Tomorrow (aka Ferryman) (摆渡人), Three Lives Three Worlds Ten Miles of Peach Blossom (三生三世十里桃花), and Ao Jiao Yu Pian Jian (傲娇与偏见).