Credit: The agreement is intended to establish a long term alliance for co-development and co-development, by pooling group resources.
While it is majority controlled by Chinese e-commerce giant Alibaba, Alibaba Pictures Group has a separate stock market listing in both Hong Kong and Singapore.
Under the terms of the deal 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. In return APG will give Youku priority investment and distribution positions to APG content. And there will be co-development of online films by APG and Alibaba Literature.
On the marketing and distribution front, both companies will use their resources to promote the brands and content of the other.
The pair will also work together to operate an artist management company.
The move was hatched some four months after the arrival of Yu Yongfu at the head of APG. He has been given the roles of chairman, CEO and board director in order to hasten change within the business.
Among the specific changes revealed, Heyi Pictures, the film making unit of Youku Tudou, will be consolidated and become part of Alibaba Pictures. Liu Kailuo, the executive in charge of Heyi Pictures, will report to Yu.
"With clear strategies and a strong team, Alibaba Pictures will endeavor to grow in terms of professional knowledge, competitive strengths and business ecologies," said in a public statement.
In an internal email Yu said that Alibaba Pictures was launched on a high and now has to move to a new phase. At the same time, given the capital- and labor-intensive and high risk nature of the TV and film business, the company had to upgrade its practices.
APG recently warned the stock markets that it would lose some $145 million for the 2016 financial and calendar year. The losses mainly stem from buying market share for its online ticketing and marketing division.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
