Alibaba has made a major purchase in cinemas, marking an important milestone as the Chinese tech giant now controls investments across the entire film industry production chain.
The company’s entertainment arm, Alibaba Pictures, bought 1 billion yuan ($154 million USD) worth of convertible bonds issued by Guangdong Dadi Cinema Construction, who own 313 cinemas over 150 cities in China.
According to a filing with the Hong Kong stock exchange submitted on Monday evening, Alibaba will take on a 4.76 percent equity stake in the cinema company.
It’s Alibaba’s first foray into physical cinemas following spate of investments in entertainment content and distribution.
“Cinemas will play an integral part in Alibaba Pictures’ operations as the company aims to build an integrated entertainment platform,” said Alibaba Pictures CEO Zhang Qiang.
China’s growing middle class has fueled several box office records in the past eighteen months. In February this year Kung Fu Panda 3 netted $57 million USD during the movie’s opening weekend, becoming China’s biggest-ever animated film launch. Last weekend Captain America: Civil War sold $96.1 million in tickets over its first three days in theaters, besting the U.S. market by over $16 billion USD.
Alibaba has previously partnered with Hollywood production companies, including Paramount Pictures and Lionsgate to distribute and market U.S. blockbusters, such as Mission: Impossible – Rogue Nation. The Chinese tech company monetizes on the lucrative deals by selling merchandise through their e-commerce channels as well as ticketing services in their own on-demand platforms.
Alibaba’s first purchase in physical cinemas means the company could soon be overseeing the entire film production process, from investment to production, marketing, ticketing and cinema sales.