Alibaba Pictures Group, the Chinese film studio affiliated to Jack Ma Yun's e-commerce giant Alibaba Group Holding, has agreed to invest in two Paramount Pictures films, according to a press release Alibaba Group sent to the Global Times on Monday, a move that is expected to pave the way for the company to turn a profit in the business.
The two films are Teenage Mutant Ninja Turtles: Out of the Shadows and Star Trek Beyond, which are going to be released in North America this summer.
They are expected to be available in China in the second half of this year, according to Alibaba Pictures.
Alibaba Pictures saw net profit of 466 million yuan ($71.87 million) in 2015, compared with a loss of 417 million yuan in 2014, according to the financial report the company sent to the Hong Kong Exchanges and Clearing Ltd in March.
But its core business posted a loss in 2015.
"China's growing movie market plus domestic investments helped Alibaba Pictures generate net profits in 2015," Huang Guofeng, an analyst at Analysys International, told the Global Times on Monday.
The agreement follows Alibaba Pictures' first investment in Paramount's Mission: Impossible - Rogue Nation in 2015, which contributed $10.6 million to the company's revenue and boosted the company's profit by $1.1 million, read a report by the US-based The Hollywood Reporter in March.
Alibaba Pictures hopes to gain more profit through the new investment in Paramount's films, said Huang, noting that the company has opportunities to be profitable in its major business due to the growing market in China, but it still depends on many factors such as Chinese audiences' feedback on the films in which Alibaba Pictures has invested.
China's total box office increased 48.7 percent year-on-year in 2015, reaching 44.06 billion yuan, according to data released by the State Administration of Press, Publication, Radio, Film and Television.
It was the highest growth rate since 2011.
"It's easy to cooperate with international companies, but it's challenging to make profit in the investments," Yang Lu, president of Leo Force Pictures, a subsidiary of Leo Group based in East China's Zhejiang Province, told the Global Times on Monday.
"It will be a trend in the future that more domestic film companies will cooperate with international movie firms, which will benefit both sides," Liu Cuiping, research director at Beijing-based entertainment consultancy EntGroup, told the Global Times on Monday
In recent years, domestic film companies like Huayi Brothers Media Corp and Bona Film Group had major shares in the Chinese market, but the situation is changing, said Liu, noting that many emerging film companies are quickly gaining market share in China, including Alibaba Pictures.
Wanda Cinema Line, China's largest cinema chain, also announced it will cooperate with Paramount to invest in the film Teenage Mutant Ninja Turtles: Out of the Shadows, according to a report from news portal 163.com on Sunday.
"Domestic film firms hope to gain dominant positions in the Chinese market via cooperating with international film giants," noted Huang.
But it's important for both sides to have a long-term plan and sustainable strategy to avoid risks, according to Huang.
