The chief executive of Alibaba Digital Media & Entertainment Group plans to throw serious money at content: Yu Yongfu, the fast-rising tech exec who was appointed CEO in a reshuffle earlier this month, said in an internal email that the entertainment affiliate will invest more than RMB 50B ($7.2B) over the next three years, Reuters reports.
He added that “he didn’t come to play” according to the note that the news service saw, and confirmed with Alibaba.
The e-commerce giant consolidated its key entertainment holdings under the Alibaba Digital Media & Entertainment Group umbrella in late October. The division’s businesses include Youku Tudou, UCWeb, Alibaba Pictures, Alibaba Music, Alibaba Gaming, Alibaba Literature and Alibaba Digital Entertainment.
At the time, it said it might create a complimentary fund of over RMB 10B ($1.5B) to invest in the digital media and entertainment industries. Reuters says it’s not clear whether that fund is part of the newly disclosed RMB 50B figure, or what assets Alibaba may be seeking.
Alibaba Pictures Group said this month that it made a “comprehensive organization and business model upgrade” that it hopes will morph it into a “content-based Goldman Sachs-type organization” that looks to be “hard-nosed” rather than “an adventurer.”
At the time Yu wrote to employees explaining that the company’s aim “is not to become a film and television production company in the traditional sense… The future is so bright, but reality is tough.”
Predicting contraction in the Chinese market, Yu wrote:
“The domestic film and television industry, following three years of savage growth, is entering a phase-out and upgrade cycle. A great number of film and television production companies will be opting out or will be edged out of the market next year. … It is both a challenge for film and TV adventurers and an opportunity for entrepreneurs… The market needs a hard-nosed film and television production company instead of an adventurer with tremendously abundant resources. We need to devote concrete and thorough efforts to developing the larger and stronger business.”
In its short existence, Alibaba Pictures has become a major player in China and is expanding its reach globally.
Last week, it led a $360M funding round in leading Chinese production and distribution group Bona Film. In November, it made a strategic investment in Hehe Pictures Corporation, which was itself an investor of the country’s biggest film of all time, The Mermaid. It also owns online movie-ticketing platform Tao Piaopiao and has made a steady series of investments in films from Paramount including Mission: Impossible – Rogue Nation, Teenage Mutant Ninja Turtles 2 and Star Trek Beyond.
In October, it took a minority equity stake in Steven Spielberg’s Amblin Partners to co-produce and finance films for global and Chinese audiences and more recently joined forces with Harry Potter producer David Heyman on Warriors, a live-action film based on the hit series of young-adult novels.