Chinese billionaires like Alibaba’s Jack Ma and Wanda’s Wang Jianlin are venturing into the cultural business.
At the moment, numerous culture-related areas such as the news industry are still off limits to the private sector.
That is why a number of Chinese businessmen have opted for movie production and the internet content industry instead.
The liquidity they pumped into the film industry, for example, has brought some side effects.
One of them is the explosion of rewards for movie stars. Some have been able to make a fortune by creating shell companies and doing a backdoor listing.
While these movie stars are benefiting substantially, actual profitability of movie making is limited. It’s often said that creating a blockbuster depends quite a bit on luck. The success ratio remains low.
Comparing Ma and Wang, the latter seems to be doing better.
Wanda expanded into the film industry years ago, and its cultural division generated more than a quarter of the group’s overall revenue last year.
Wanda Cultural Industry Group posted a 25 percent jump in revenue to 64.1 billion yuan last year from the year before. Of this, movie-related operations reached 58.9 billion yuan, representing 90 percent of the total.
Wanda’ s nationwide cinema chain fetched a box office of 5.1 billion yuan last year, accounting for more than 80 percent of the market.
Wang has set an ambitious goal to sell Chinese movies globally in next five to 10 years.
In the meantime, Jack Ma also made a push into the culture industry. He has invested in movie production and acquired stakes in Sina Weibo and the South China Morning Post.
But these investments are yet to yield any real money for Alibaba.
Quite the reverse, See You Tomorrow, the first movie produced by Alibaba Pictures Group has disappointed at the box office.
This article appeared in the Hong Kong Economic Journal on Jan. 20
Translation by Julie Zhu
[Chinese version 中文版]
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