China’s Alibaba buys stake in Spiel­berg firm

Kuwait Times - - TECHNOLOGY -

Chi­nese in­ter­net bil­lion­aire Jack Ma has bought a stake in cin­ema leg­end Steven Spiel­berg’s com­pany, they said, the lat­est tie-up be­tween China and Hol­ly­wood as they seek to make movies for au­di­ences in the Mid­dle King­dom and beyond. Alibaba Pic­tures, a unit of Ma’s sprawl­ing e-com­merce con­glom­er­ate, has taken a mi­nor­ity share­hold­ing in Spiel­berg’s Am­blin Part­ners, a film cre­ation com­pany that in­cludes Dream­Works stu­dios.

The deal will see the com­pa­nies co­fi­nance and co-pro­duce movies for Chi­nese and in­ter­na­tional au­di­ences, Alibaba said on its cor­po­rate web­site. The agree­ment marks “an im­por­tant mile­stone” in the Chi­nese firm’s strat­egy to reach do­mes­tic and global au­di­ences, its chair­man Shao Xiaofeng said in a state­ment. Alibaba Pic­tures will also have a seat on the board of Am­blin. Fi­nan­cial de­tails of the deal were not dis­closed.

At a press con­fer­ence in Bei­jing on Sun­day, Spiel­berg-who shot his 1987 movie “Em­pire of the Sun” in Shang­hai — said the part­ner­ship will al­low him to “bring more China to Amer­ica and bring more Amer­ica to China”, ac­cord­ing to the Alibaba state­ment. Alibaba chief Jack Ma said that while the US and China “may have cul­tural dif­fer­ences”, the part­ners will fo­cus on hu­man sto­ries and serve as a bridge be­tween the two coun­tries.

Bei­jing has am­bi­tions to in­crease China’s “soft power” and the deal is the lat­est in a wave of Chi­nese money flow­ing to Hol­ly­wood, with real es­tate de­vel­oper turned me­dia con­glom­er­ate Wanda buy­ing Juras­sic World cre­ator Legendary En­ter­tain­ment for $3.5 bil­lion ear­lier this year.

Last month Wanda-which snapped up US movie theatre chain AMC in 2012 for $2.6 bil­lion-an­nounced it would in­vest in movies pro­duced by Sony Pic­tures, its first deal with one of Hol­ly­wood’s so-called “Big Six” stu­dios. Wanda’s Hol­ly­wood am­bi­tions have raised eye­brows in the US, where 16 law­mak­ers last month wrote to the US Govern­ment Ac­count­abil­ity Of­fice (GAO) sug­gest­ing that com­pany chair­man Wang Jian­lin-who has close ties to the Chi­nese govern­ment-may be seek­ing to “cen­sor top­ics and ex­ert pro­pa­ganda con­trols on Amer­i­can me­dia”.

The let­ter called for the GAO to re­view Chi­nese pur­chases of me­dia and other com­pa­nies that may “pose a strate­gic threat” to US in­ter­ests, and urged it to con­sider broad­en­ing the of­fi­cial def­i­ni­tion of na­tional se­cu­rity to ad­dress­ing con­cerns about “pro­pa­ganda and con­trol of the me­dia” by for­eign firms.

Ear­lier this year Alibaba com­pleted the pur­chase of Hong Kong’s South China Morn­ing Post news­pa­per, an ac­qui­si­tion which has raised con­cerns in the semi­au­tonomous for­mer colony about in­creased main­land in­flu­ence in its me­dia.

Asked about the US con­cerns in an in­ter­view posted on the com­pany web­site, Alibaba Pic­tures pres­i­dent Zhang Wei said that stu­dios de­pend on rev­enue from in­ter­na­tional au­di­ences and thus make movies that fo­cus on universal themes and val­ues.

“You don’t see us com­ing to buy up Hol­ly­wood,” she said. She added the the tie-up was “not just a fi­nan­cial in­vest­ment” and that her com­pany chose Am­blin over other Hol­ly­wood part­ners be­cause their early con­ver­sa­tions did not fo­cus only on fund­ing.

“There’s a lot of hot money from China float­ing around Hol­ly­wood right now, and we’ve had quite a few peo­ple ap­proach­ing us want­ing a part­ner­ship,” she said. “Of­ten­times peo­ple see us as a source of cap­i­tal and as a way into China.” The deal will give Spiel­berg’s com­pany ac­cess to Alibaba’s on­line ecosys­tem and films will be dis­trib­uted through stream­ing plat­forms such as the group’s Youtube-like Youku Toudu.

For­eign film com­pa­nies are heav­ily re­stricted from en­ter­ing China’s boom­ing mar­ket, with an opaque re­view process and govern­ment caps lim­it­ing the num­ber of non-Chi­nese movies that can be shown.

Cen­sors en­force a broad and shift­ing set of pro­hi­bi­tions that cover sex and vi­o­lence as well as po­lit­i­cal or his­tor­i­cal con­tent the rul­ing Com­mu­nist Party deems un­ac­cept­able.

To get around re­stric­tions, Hol­ly­wood stu­dios look­ing to cap­i­talise on China’s bur­geon­ing mar­ket have sought part­ner­ships with lo­cal com­pa­nies.

The po­ten­tial re­wards are sub­stan­tial, as China’s movie mar­ket has ex­ploded and Price­wa­ter­house­Coop­ers projects its box of­fice will rise from $4.3 bil­lion in 2014 to $8.9 bil­lion in 2019, out­strip­ping the US. But box of­fice fraud is a wide­spread prob­lem and films have been ex­posed pump­ing up ticket sales to gen­er­ate mar­ket­ing buzz. —AFP

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