China

Alibaba Plans Big Investment in Entertainment; Starts with 1 Bln Yuan in Video Website Youku Tudou

Summary:

  • Alibaba Group’s (BABA.NYSE) online video website Youku Tudou announced on April 18 that it has reached a partnership agreement with Alibaba’s two other media units, Alibaba Pictures (1060.HK) and Alibaba Literature. The three units will together invest 1 billion yuan to reinforce marketing efforts and also open up more resources to Youku Tudou’s users to help them produce higher quality videos, as Tencent Tech reports.
  • This comes as the first move of Alibaba after the company announced a consolidation of its media units in October of last year.

Why It Matters:

  • Like Youtube, Youku Tudou’s users can create their own channels, upload their own content and make profits. To keep motivating users to make high-quality content and upload them is important for Youku Tudou to stand out in the highly competitive market.
  • Youku Tudou will provide more attractive profit-distribution options to its users, Alibaba Literature will provide Youku Tudou users’ high-quality original stories and scripts, and Alibaba Pictures will provide financial and marketing support.
  • From 2010, Youku Tudou traded on Nasdaq with the stock ticker “YOKU”. In 2016, Alibaba took over Youku Tudou and the company completed a privatization. After the deal, Youku Tudou became a fully-owned subsidiary of Alibaba.