Alibaba may acquire Paramount, and the domestic film industry landscape will change

In April this year, Alibaba Pictures announced a partnership with Paramount to invest in Mission: Impossible 5: Rogue Nation, and will also work with Paramount in ticketing, derivative merchandise and film promotion. At the time, Alibaba Pictures said that the cooperation was just the beginning of the company's internationalization, and it would continue to explore opportunities to cooperate with more international film companies in the future.

Just recently, Alibaba Pictures' chance to enter Hollywood seemed to be right in front of them. The second largest shareholder of Paramount's parent company Viacom extended an olive branch to Alibaba: "If Alibaba is serious about entering the entertainment industry, then Viacom should sell part of Paramount's shares to Alibaba."

Enter Hollywood

Let's look at a set of data first: In 2014, "Transformers 4" earned more than $300 million in China, accounting for more than a quarter of the global box office. In 2015, the combined Chinese box office revenues of "Terminator: Genisys" and "Mission: Impossible 5: Rogue Nation" were close to $250 million, also more than 20% of the total box office.

These three films produced and distributed by Paramount have made a lot of money in China. Seeing this, Paramount is eager to rely on Jack Ma to get a share of the Chinese market to make its financial statements look better. Alibaba is also waiting for an opportunity to enter Hollywood and make a big splash in the international entertainment market. You should know that among all the giants, Paramount is the only one that still holds on to Hollywood (in the geographical sense).

Paramount's move is not wishful thinking. In November last year, there was news that Alibaba intended to purchase 37% of Lionsgate's shares.

Layout of domestic cinema chains

Jack Ma's plan started from the day when Alibaba Pictures was established, or even earlier. He has always hoped to turn Alibaba Pictures into an "international film and television group" like the six major Hollywood companies such as Disney and 20th Century Fox.

Although Alibaba Pictures currently only focuses on production and distribution among the three links of film production, distribution and broadcasting, it has not yet established a theater system with deep cooperation in China and is under strong oppression from other theaters. It is unknown whether Alibaba will refer to Hollywood's tiered profit-sharing in the future, but given Alibaba's personality, it will never succumb to oppression.

On April 21, 2015, Alibaba Pictures Group announced that it had successfully bid for Guangdong Yueke Software Engineering Co., Ltd. with 830 million yuan in cash. Alibaba Pictures' full acquisition of Yueke Software at nearly five times the price was not simply a tyrant's willfulness. Alibaba Pictures, which has been upgraded to a platform company, actually injected Alibaba Pictures with the strength to dig deep into the ground and laid the groundwork for a broader extension platform in the future.

my country began to introduce Hollywood split-revenue films in 1994. In order to meet the needs of revenue sharing, the China Film Research Institute and China Film Corporation started a project to develop "computer ticketing management software". Guangdong Science and Technology Software was born in this context.

One thing needs to be pointed out in particular: not everyone can enter the cinema computer ticketing management software industry. Even when a large number of Internet companies have entered the cinema online seat selection market with the power of big data and e-commerce models, this business is still not something that Internet companies can easily get involved in - because of the "license".

The cinema ticketing system holds almost all the business secrets of cinema chains and cinemas: film schedule information, price system, membership data, merchandise revenue, etc. Although Alibaba has online seat selection applications like Taobao Movies, they are just a layer of applications floating on the surface of the cinema ticketing system, which can sense and influence the business strategies of cinema chains and cinemas. However, Yueke Software not only touches the cinema ticketing system, it almost covers all software systems currently involved in cinema operations.

IP development and monetization

Alibaba Pictures spent 830 million to buy the core technology and secrets of the cinema business - control of cinema chains. First, grab the land, then cultivate it slowly. Alibaba's acquisition of Yueke is to first grab a piece of lush land for future layout.

We must not forget Alibaba's core business - e-commerce. The layout of Alibaba Pictures cannot be simply viewed from the perspective of the film industry. Alibaba acquired Guangdong Science and Technology, took over Youku, invested in Guangguang, and started Alibaba Pictures offline. Except for the theaters with which it does not have deep cooperation, Alibaba seems to have opened up all the links.

According to published data, Taobao has 350 million active users. Together with Alipay and Taobao Movies, it has a huge user base, and the access ports and audiences are ready. Entertainment Bao under Alibaba Pictures can warm up the movie by holding fan meetings, participating in premieres, and obtaining movie peripherals. Taobao and Tmall allow audiences to directly purchase movie peripheral derivatives. It is still the same theory of IP development and realization. Alibaba has strong distribution and realization capabilities. It has laid out the output end, and now it is just missing the source IP creation and production end.

The hidden worries of monopoly giants

However, Alibaba Pictures is still obsessed with the usual C2B model. Introducing the C-end has always been Alibaba's Internet thinking, but the drawbacks are also very obvious. As an art form, once the audience has the majority of the initiative, the model of making movies with meticulous craftsmanship may be eliminated, popcorn movies and fan-oriented movies will fill the screen, and artistic elements may disappear from the screen. By then, movies will no longer be movies.

Xu Hongxiang's remarks at Alibaba Pictures put the dominance of capital on the table. Even if Alibaba acquires well-known film production companies such as Paramount or Lionsgate, it still cannot reconcile the contradictions between capital and creation. The deformed and abnormal "marketization" will eventually burst the false prosperity bubble in the film and television industry.

At present, the layout of Alibaba Pictures is not very clear. It is speculated that in the future Alibaba Pictures is likely to integrate financing, production, distribution and marketing.

This can't help but remind people of the "Paramount Case": when a big studio owns its own or its partners' theater chains to screen its own films; the big studio hires screenwriters, directors, producers and actors as their employees, owns the films, produces posters and advertisements, and distributes and screens them through its own theaters.

In other words, the big studios use their vertical monopoly over the entire process to create a market situation where supply actually exceeds demand and make profits. If all this comes true, it is also something that the majority of film workers and fans do not want to see.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.