Alibaba Pictures Group (APG) and its Chinese parent company Alibaba are to set up an artist management division as part of a three-year strategic co-operation agreement.
By pooling group resources, the deal is intended to establish a long-term alliance for co-development, Nasdaq reports. It also means that on the marketing and distribution front, both companies will promote the brands and content of its counterpart.
APG has a separate stock market listing in both Hong Kong and Singapore, even though it is majority controlled by the Chinese e-commerce giant Alibaba.
The contract states that Alibaba will give priority to APG for all rights flowing from its related business units, which include Alibaba Gaming, Alibaba Literature and streaming video giant Youku Tudou.
APG will give Youku priority investment and distribution positions to its content. It has also been agreed that there will be co-development of online films by APG and Alibaba Literature. The two companies will also collaborate to operate an artist management company.
Following the arrival of Yu Yongu as the head of APG four months ago, he has been the chairman, chief executive and board director in an effort to speed up development and change within the business.
As a part of the changes to be made, Heyi Pictures, the film-making unit of Youku Tudou, will be consolidated and become part of APG.
“With clear strategies and a strong team, Alibaba Pictures will endeavour to grow in terms of professional knowledge, competitive strengths and business ecologies,” Yu said in a public statement.
An internal email revealed Yu explaining that based on the capital and labour-intensive and high-risk nature of the TV and film business, the company had to upgrade its practices.
APG recently posted a $140m (£112m/€132m) loss in 2016 after incurring significant marketing costs in relation to its mobile ticketing app, Tao Piao Piao.
The filmmaking arm of Alibaba issued a profit warning to the Hong Kong Stock Exchange late last month.
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