Alibaba Pictures has been established for two years and the leading work has not yet produced a business model. Profit is still uncertain.

July 29 is a day worth remembering. At the end of domestic Film Protection month, the worst movie of 2016 has finally appeared in front of us. With the emergence of this film, "Fuchun Mountain" has to avoid three points. " In Douban's film review, the Legend of God was drowned out by curses.

as one of the producers of the Legend of God, Alibaba Pictures announced the establishment of an industrial fund on July 25. among the funds with a target fund of 2 billion yuan for the first phase, Alibaba Pictures has a maximum subscription of 500 million yuan.

in the two years since its establishment, Alibaba Pictures CEO Zhang Qiang's definition of Alibaba Pictures has changed several times-from Internet entertainment companies to the builders of Internet entertainment ecology, from content providers to platform providers, from investing in 8-10 films a year to making 3 films with Alibaba Pictures LOGO a year.

despite his ambitions, the first film, Ferry Man, led by Ali Pictures, has not yet been released. It is not difficult to see that even Ali Pictures, which has a cash flow of 10 billion yuan, is not plain sailing in professional film and television production.

unlike the way Hollywood studios open the layout of the whole industry chain by content production, Ali's entry into the film industry relies on capital to open the way. Since its establishment, Ali Pictures has spent a lot of money to acquire companies in the upper and lower reaches of the film industry chain to occupy the market. Two years after its establishment, it has basically opened up the whole industry chain of content production, offline distribution, online ticketing platform, offline cinema and entertainment e-commerce.

the opening of capital not only makes Alibaba Pictures successful, but also makes its shares rise sharply after every acquisition. However, behind the glamorous capital is Ali's losses for six consecutive quarters.

on the evening of July 22, Alibaba Pictures issued a performance warning announcement, saying that the company expects its loss to increase by nearly 300% in the first half of 2016 compared with the same period last year, which has been Alibaba Pictures' continuous loss for six quarters.

"being good at storytelling has always been the style of Ali Pictures. Apart from not making money, everything else is good, the concept is good, the mountain is good, and based on the concept of the Internet, there is a lot of room for imagination for investors." So commented an investment bank in the film and television industry.

strong > the film and television production "dystocia" / strong >

Ali Pictures, which was born with the golden key, has brought its own halo since its inception, with not only movie star Zhao Wei taking a stake, but also Alibaba, a big tree to rely on.

even so, Ali Pictures still has shortcomings in film and television production. Two years after its establishment, Alibaba Pictures' homemade film Ferry Man, produced by Wong Kar-wai and starring Tony Leung, was originally scheduled to start filming in 2014, but was not officially launched until January last year. The first film product with full control after Alibaba Group entered the field of cultural film, film and television entertainment has not yet been published.

the homemade film has not been available for a long time, and Ali Pictures has changed its words again and again. At the beginning of its establishment, CEO Zhang Qiang said that Alibaba Pictures invests or produces 8-10 films, 3-5 large and medium-sized TV series and 3-5 online series every year. At the Shanghai Film Festival a few months ago, this statement became a film with three LOGO films a year.

making a movie doesn't seem to be a top priority for Ali Pictures. But Ali Pictures does not agree.

Ali Pictures PR Zhao Nige told reporters: "content production has always been one of the important businesses of Ali Pictures. Making three films a year means that there are three films led by Ali Pictures itself, and the figures are not counted as foreign investment. The total figure is quite the same. Just because the film and television production has a certain cycle, so the output time is relatively long, such as "Ferry Man" has been killed, "three generations and Ten Mile Peach Blossom" has also reached the post-production stage, the specific release time has not been finally determined. "

Zhao Nige said it was not convenient to disclose the proportion of content production investment in Alibaba Pictures' entire business.

in fact, Alibaba Pictures did not forget to recite itself with the help of high-grossing films before the release of its own leading film.

on Alibaba Pictures' official website, "Dear" and "Mission impossible 5", which have received a good response at the box office, are particularly eye-catching, but in the official introduction of the above-mentioned film, Ali Pictures has not seen Alibaba Pictures on the list of publishers and distributors. obviously, Alibaba Pictures is just a follower, not a leader. In the Legend of God, which was released on July 29, Ali Pictures also only followed the vote, but did not appear on the official website.

although the homemade work is difficult to give birth, Ali Pictures has not slackened its layout in the area of content production.

in the first year of its establishment, Ali Pictures signed a cooperation agreement and supplementary agreement with Chunguang Film authorized by Wong Kar-wai. He has also established cooperative relations with directors Chen Kexin, Yin Li, Ding Sheng, screenwriter Nine Dao, Haiyan, actors Chen Baoguo and Huang Bo.

while setting up an excellent production team, Alibaba Pictures also began to look for experienced production units to cooperate. In October 2014, Alibaba Pictures signed a letter of intent with Hengdian Film and Television City, planning to invest in setting up a film company in Hengdian, mainly engaged in film investment, development, production, publicity, distribution and other matters. However, Zhao Nige said, there are no substantive projects in the above plan.

in February 2015, Alibaba Pictures reached strategic cooperation framework agreements with Shenzhen Radio, Film and Television Group and Guangdong Radio and Television respectively, which will make use of their respective resources and channel advantages, according to the needs of the broadcasting platform, the two sides will jointly develop and jointly invest in the production of e-commerce customized TV dramas.

despite such intensive preparatory work, Ali Pictures did not hand in satisfactory answers in film and television production. At this year's Shanghai Film Festival, Ali Pictures, which has yet to produce a homemade film, released a list of 17 films and two TV dramas again. "it's just that these films are planned to be made in the future, the specific timetable has not been decided, and how to cooperate has not been determined." Zhao Nige said.

the reporter contacted Bai Zhongyu, a public relations expert from Ali Pictures, on issues related to Ali Pictures' film and television production and industrial layout, who also politely declined the reporter's interview on the grounds that the boss was not in China and the itinerary was uncertain.

Ali Pictures, which is slow to make its own works, is very active in investing in IP copyright. In the past two years, Alibaba Pictures has bought the film adaptation rights for the novel "returning the Pearl", the IP for the TV series "three generations and Ten Mile Peach Blossom", the TV series adaptation rights for "Ghost blowing the Lantern", and decided to invest in the production of Li Shaohong's TV series "the heir."

Zhang Qiang also expressed his importance to film and television IP on public occasions. "domestic high-quality IP has basically been robbed, and Ali Pictures has two ways to deal with it. First, Alibaba Pictures buys IP around the world and incubates IP on its own. Youku Tudou is an incubator for Ali Pictures, which can breed a lot of brand-new IP. "

previously, when Ali Literature was founded, it was thought that Ali Pictures would hand over the important responsibility of incubating IP to Ali Literature, but so far, Ali Literature has not taken any substantive action and has been replaced by Youku Tudou.

to make an excellent IP into a film and television work, you still need to look at the skills of the production company. In the resource-intensive industry of film, Alibaba Pictures hopes to connect the two basic resources of content and excellent directors to enhance the attractiveness of its platform. But for now, Ali still failed to get what he wanted.

"Ali has not developed as fast as imagined in film and television production. In the two years since its establishment, a leading work has not been produced, mainly because the production mechanism of Ali Pictures is not yet mature and some resources are not yet complete. Especially the accumulation of network resources. Film and television production not only needs capital support, but also needs the support of talents, contacts, IP and other resources, which are indispensable. The film and television industry takes content as the core, and high-quality content can be promoted not only by capital, but also by people. " Cai Ling, a consultant on the cultural and entertainment industry of CIC, analyzed why Ali Pictures could not produce self-made content.

"Ali Pictures has a long plan, but many things have not actually landed. In the area of film and television production, Ali is also faced with the problem of high-risk investment, which is also a deficiency for it at present." The data analyst told reporters.

with regard to Ali Pictures's shortcomings in film and television production, analyst Li Jiachao told reporters: "Film and television production cannot be completed smoothly with the intervention of capital. Film production has its own laws, which not only requires excellent creativity, but also needs to be done by a team. Professional things need professional people to carry out, and capital can not completely infiltrate the industry. Ali's ambition in film and television production is open to question, the experience will be more bumpy. "

strong > Entertainment whole industry chain platform / strong >

what is the difference between Ali Pictures and traditional and emerging film companies? What role does it play in the ecological chain of the film and television industry?

as for the role played by Alibaba Pictures, Zhang Qiang said that Alibaba Pictures is trying to build a complete platform service system, including project investment and financing to content production, film publicity, cinema docking, derivatives and so on. Paramount, Huayi Brothers, Light Media and Wanda can all use the system.

like Ali Pictures, the film and television enterprises of Wanda, Letv, Tencent and Baidu all want to develop film and television business with Internet thinking, and tend to lay out the film and television ecological chain. The difference is that Alibaba Pictures is committed to building a platform, such as content production, its implementation of the partnership system, through project joint ventures or equity investment, to establish a close relationship with partners to achieve resource sharing, complementary advantages and common development. If Ali Pictures's platform strategy goes smoothly, it may occupy the high ground of the film and television market.

"Ali Pictures obviously conforms to the market trend by relying on its own sufficient funds to build a large platform, but Ali's ambition is even greater. However, it is very difficult to integrate all kinds of resources to build a whole industry chain platform overnight. " Li Jiachao said.

as for Ali's platform model, Cai Ling told reporters that Alibaba Pictures is committed to creating a "platform for the whole entertainment industry chain" and wants to transform films through Internet thinking and technology, which will be more difficult. Film and television workshop production in China has always been more common, and the profit distribution model on Ali Pictures platform is not yet mature, less attractive to other film and television enterprises, and greater integration challenges. When this business model will be profitable, there is a great uncertainty, depending on the specific development of Alibaba Pictures, but the probability of making a profit in the past two years is relatively small.

in order to achieve its goal, Alibaba Pictures has established an O2O film promotion system, integrated online ticketing, and, together with many online ticketing platforms, increased the online ticketing rate from 30% at the beginning of last year to 80% at the end of 2015. In addition, through the acquisition and other actions, the film publicity system of O2O has been gradually established.

Ali's action is called by the industry insiders as burning money to seize the market. "the film and television industry is not like other industries that can seize market share simply by burning money, because film and television products are at greater risk, even if they use well-known directors, actors, and so on. it is not necessarily possible to produce film and television works with high box office and audience ratings." Cai Ling told reporters.

the negative effect of the money-burning mode also appears. Alibaba Pictures issued a performance warning announcement on July 22, saying that the company expects its loss in the first half of 2016 to increase by nearly 300% compared with the same period last year, and expects a net loss of 400 million to 450 million yuan in the first half of this year, mainly due to "marketing expenses for ticket hunting."

this is not the first loss of Ali Pictures. In the first year of its establishment, Ali Pictures achieved an operating income of 127 million yuan and a loss of 417 million yuan.

in 2015, Alibaba Pictures turned a loss into a profit, with a net profit of 466 million yuan. In the same period, Alibaba Pictures had a total revenue of 264 million yuan, an increase of 108.30% over the same period last year.

it is worth noting that under the gorgeous performance appearance, Alibaba Pictures lost more than 400 million yuan in its main business. In 2015, Alibaba Pictures had a main business income of 263 million yuan, deducting sales and service costs of about 288 million yuan, and an actual loss of about 25 million yuan. In addition, Alibaba Pictures had an operating loss of nearly 400 million yuan in 2015, including management fees, market fees and so on.

and because Alibaba Pictures received a foreign exchange income of 800 million yuan, the loss of 400 million yuan of Ali was filled up, leaving a net profit of 466 million yuan. In this net profit, goodwill assets amortized by year are also included. Among Alibaba Pictures' total assets worth about 18.9 billion yuan, there are 3.49 billion yuan worth of goodwill assets, mainly from "acquiring subsidiaries", but not amortized year by year.

"the statement will look better without amortization. After all, Alibaba Pictures is a light asset model, and the high price-to-book ratio will cause concern to shareholders." Shen Meng, executive director of Xiangsong Capital, told reporters.

strong > frequent capital operation / strong >

Ali Pictures, whose performance is losing money, has a remarkable performance in the capital market.

Ali Pictures's capital operation broke out centrally, after the release of the 2014 annual report. At that time, Alibaba Pictures needed a new "story" to impress the capital markets.

at the end of 2014, Alibaba Pictures' share price was at a low ebb. Zhao Wei and his wife bought 1.93 billion Alibaba Pictures shares for HK $3.088 billion, accounting for 9.18% of the shares, ranking behind Jack Ma.

on April 8, 2015, Alibaba Pictures announced that its parent company, Alibaba, had injected Taobao movies and entertainment bao into Alibaba Pictures. After resuming trading, the market capitalization of Ali Pictures is equivalent to more than 68 billion yuan. Far surpassing Huayi Brothers (44 billion yuan) and Light Media (37.8 billion yuan) at that time, it became a veritable leading stock in the film and television industry.

on April 22nd, Alibaba Pictures announced that it had acquired a 100% stake in Guangdong Yueke Software Engineering Co., Ltd. for 830 million yuan through its indirect wholly-owned subsidiary Zhonlian Shengshi Culture (Beijing) Co., Ltd.

after a series of capital operations, Alibaba Pictures shares rose sharply. Alibaba Pictures also took advantage of the "great opportunity" to dilute equity financing. On June 11, 2015, Alibaba Pictures announced that it had placed nearly 4.2 billion shares to six investors at a price of HK $2.90 per share (19.89% discount to the market price), raising a net sum of HK $12.1 billion. Together with the cash on its books, Alibaba Pictures had a cash flow of HK $18 billion.

Ali, who has a lot of money in his hand, starts a new movement again. On December 15, 2015, Alibaba Pictures once again announced that it would join the buyer consortium through its wholly-owned subsidiaries and participate in the privatization deal of Bona Pictures. Alibaba Pictures will invest about $86 million and hold about 10 per cent of Bona Pictures after the privatisation deal is completed.

in May this year, Alibaba Pictures subscribed for 1 billion yuan of convertible bonds of Earth Cinema through its subsidiaries. According to the agreement, the principal of the bonds was converted into equity investment in Earth Cinema, corresponding to 4.76% of the shares of Earth Cinema.

A series of actions allow Alibaba Pictures to complete the layout from all aspects of the industrial chain, such as IP incubation, film and television production, distribution and marketing, finance, derivatives, and so on. The layout of the whole industrial chain is full of imagination.

"Ali's entertainment treasure in publicity and development can help. There is a lot of room for the domestic market in derivatives. In the future, we will combine cinema chain resources for sales, and our operation in this area will be more intelligent. In the short term, we will not take profit as the main goal. In the future, Ali Pictures will certainly carry out layout and investment around the film and television industry chain, because the investment layout of Ali Pictures is relatively wide, is the whole industry chain, and is more flexible, so it will not be affected by the strict mergers and acquisitions of the film and television industry by the current regulators. " Zhao Nige said.

"Ali has funds and consumers. Funds can pry large projects and increase the value of projects with the help of Ali's fame." On the other hand, Taobao with consumers can generate more fan benefits, and Alibaba Pictures can build a platform for the film industry to build an ecosystem and solve the problems of money and customers at the same time. In the short term, Ali is not doing very well, and the ultimate goal of capital is to continue to make profits. " An investment banker engaged in the film and television industry told time Weekly.

"Ali Pictures is different from traditional film and television companies in that it is an ecological service company in the entertainment industry, which helps upstream and downstream companies in the film and television industry to better match resources. This kind of platform enterprise is a trend. Alibaba Pictures has also launched products such as Taobaopiao and Entertainment Bao. Film and television production and derivatives are relatively weak, which is still far from the goal of entertainment e-commerce. " Industry insiders told reporters.

Edit: nancy