Alibaba is pushing into the entertainment industry. The internet giant has one huge advantage, traditional filmmakers can only dream of, says business professor Jeffrey Towson in the Nikkei Asia Review. “Alibaba is attempting to create a new type of smart production that replaces “big bets” with “big data”.”
Alibaba Pictures‘ cinemas naturally show a mix of the company’s own films and ones from other domestic and foreign studios. Cofinancing and equity partnerships can play a role in this, as seen in the company’s investment in Paramount Pictures‘ last “Mission Impossible” movie. Such partnerships are important because getting to international levels of quality has proved to be more difficult for Chinese studios than expected.
Yet Alibaba Pictures is also making unconventional moves in distribution. With its Tao Piaopiao movie ticketing app, the company is subsidizing pre-release purchases. This gives it a two-week advance window to gauge interest in specific films and insight into what Chinese consumers actually want to see. The ticketing app in turn is linked to Alibaba Pictures’ theater operations software, which is in use at some 70% of local cinemas for ticket sales, screen booking and other functions, further expanding the company’s data gathering.
Add to this distribution channels controlled by Alibaba Group, such as the Youku Tudou video streaming sites, the growing Alibaba Cloud computing service and UCWeb, a popular internet browser for mobile phones. In this way, Alibaba can see what hundreds of millions of Chinese consumers are buying and watching in real time. Compare that to to a typical film studio, which spends 1-2 years making a movie based mostly on a gut feeling and then hopes it will do well if there is a large marketing budget behind it. Alibaba is attempting to create a new type of smart production that replaces “big bets” with “big data”.
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