November 2, 2016:Alibaba’s new digital media group has $1.5bn to spend

Chinese technology firm Alibaba has consolidated its various digital media activities – music included – into a single group, with a $1.5bn fund available to spend on new projects.

According to Bloomberg, the new Alibaba Digital Media and Entertainment Group will include music, games, video service Youku Tudou, movies arm Alibaba Pictures Group and other digital properties in one unit.

In one sense, it’ll be business as usual for the various parts of this new unit: this is a corporate restructure, albeit one that hammers home Alibaba’s determination to be a significant player in the entertainment industries. All of those sub-units will have claims on the $1.5bn fund, of course, but that includes potential for more acquisitions and investments on the music side of Alibaba’s business.

That’s an increasingly active unit too. In February, Alibaba bought a 4% stake in South Korean music company SM Entertainment, before unveiling its Alibaba Planet social music platform in April. The latter is a way for music fans to follow their favourite artists, watch live streams and buy merchandise, capitalising on Alibaba’s juggernaut e-commerce business.

Journalists elsewhere in the world often use western-biased shorthand for Chinese tech companies: Alibaba as ‘the Chinese Amazon’ or Baidu as ‘the Chinese Google’ for example. While there are parallels with the expansion of those western companies into video and music streaming, in fact the Chinese firms (see also: Tencent) are more advanced in their investment in the creative side of these businesses: music, games, TV shows, films and more.

Stuart Dredge
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