Alibaba unit buys Yueke to ex­pand cinema reach

China Daily (Canada) - - FRONT PAGE - By CHI­NADAILY

Alibaba Group Hold­ing Ltd’s cinema unit said on Tues­day that it has ac­quired a ma­jor cinema soft­ware ser­vice provider in China to fur­ther ex­pand its pres­ence in the na­tion’s boom­ing film mar­ket.

The Hong Kong-listed Alibaba Pic­ture Group Ltd con­firmed it has bought Guang­dong Yueke Soft­ware En­gi­neer­ing Co for 830 mil­lion yuan ($134 mil­lion). The com­pany, in which Alibaba owns a 60 per­cent stake, said when the deal is com­plete, Yueke will be­come its wholly owned sub­sidiary and of­fer bet­ter ser­vices to cine­mas by tak­ing ad­van­tage of its In­ter­net re­sources.

Yueke, as a ma­jor soft­ware so­lu­tion provider in China’s film mar­ket, pro­vides soft­ware sup­port to more than 1,500 of 5,780 cinema the­aters in China.

The ac­qui­si­tion is part of Alibaba’s broad strat­egy to ex­pand into the cul­ture and en­ter­tain­ment sec­tor. In March, the e-com­merce gi­ant ac­quired an 8.8 per­cent stake in TV con­tent and film pro­ducer Bei­jing En­light Me­dia Co Ltd worth 2.4 bil­lion yuan.

In April, Alibaba also merged its on­line movie tick­et­ing and movie pro­duc­tion crowd­fund­ing busi­nesses into Alibaba Pic­ture to in­te­grate its en­ter­tain­ment busi­ness.

Huang Guofeng, an an­a­lyst at Bei­jing-based In­ter­net con­sul­tancy Analysys In­ter­na­tional, said the ac­qui­si­tion shows that Alibaba is now present across the whole movie in­dus­try chain in China.

“Yueke is deeply in­volved in all as­pects of theater man­age­ment sys­tems, such as seat­book­ing and ar­rang­ing cinema sched­ules. Yueke can help Alibaba lay down a tech­nol­ogy in­fra­struc­ture for its en­ter­tain­ment plat­form,” Huang said.

“With the pur­chase of Yueke, Alibaba has also be­come the first In­ter­net gi­ant, com­pared with its ma­jor ri­vals Baidu Inc and Ten­cent Hold­ings Ltd, to ex­pand into all movie-re­lated busi­nesses,” Huang said, re­fer­ring to the com­pany’s en­gage­ments in film pro­duc­tion, movie dis­tri­bu­tion and ticket sell­ing.

The in­ten­si­fied push by Alibaba to at­tract film buffs comes af­terChina be­came the world’s sec­ond-largest cinema mar­ket last year, sec­ond only to North Amer­ica.

Fig­ures from the State Ad­min­is­tra­tion of Press, Pub­li­ca­tion, Ra­dio, Film and Tele­vi­sion show that the to­tal box of­fice re­ceipts in China reached 29.6 bil­lion yuan in 2014.

Jane Zhang, an an­a­lyst at IT re­search firm Gart­ner Inc, said the move has an im­pact on Alibaba’s cloud com­put­ing and big data ser­vices.

“Un­like re­tail­ing and other sec­tors whose in­for­ma­tion sys­tem is not that well de­vel­oped, the movie in­dus­try boasts a high level of in­forma­ti­za­tion, which al­lows soft­ware ser­vice providers like Yueke to col­lect huge trans­ac­tion data,” Zhang said. Ma Si con­trib­uted to this story.

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