In a further push into China’s entertainment sphere, e-commerce giant Alibaba has pacted with Lionsgate to launch Lionsgate Entertainment World, a subscription streaming service for the mainland. The service will be available exclusively through Alibaba’s set-top boxes and will give users access to high-profile Lionsgate titles including Divergent (which has not had a theatrical release in China), pics from the Twilight and Hunger Games franchises, and TV series The Royals, Nashville and Mad Men. The deal gives Lionsgate bigger exposure in the fast-growing Chinese market where many consumers watch content online — which has traditionally flown lower under the radar of the Middle Kingdom’s famous censors. Alibaba filed for a U.S. IPO earlier this year and recently took a majority stake in ChinaVision Media Group, now Alibaba Pictures Group, as part of its bid to expand. The Wall Street Journal reports that the company has also recently approached Chinese film studios about creating or acquiring content for its online service, and that it is eyeing further investment in local studios. Launch of Lionsgate Entertainment World is expected next month. David U. Lee, founder and president of Leeding Media, helped orchestrate the agreement.
Global Showbiz Briefs: Alibaba, Lionsgate In China Streaming Deal; Discovery Western Europe Hires BBC Veteran; More
In this edition of the podcast, Deadline’s executive editor David Lieberman and host David Bloom recap Deadline’s annual report on the most out-of-whack paydays for CEOs in media. Who got paid the most compared to their own top colleagues this past year? We’ll also jump on the news carousel with big deal-related stories affecting All3Media, Apple and Alibaba; and decide what to make of Liberty’s John Maffei statement that Charter is still looking for more cable buys after its $20 billion deal with Comcast.
Alibaba, China’s e-commerce giant, filed paperwork today (read it here) to publicly offer stock in the U.S., a move that will likely attract many billions of dollars in investor capital and also finally let owners of Yahoo stock know how much that company’s 24% stake in the company is actually worth. Alibaba is considered the world’s largest e-commerce site, both online and on mobile, operating a series of marketplaces — all for third-party partners that run their own online stores there. The company also runs Alibaba.com, AliExpress and provides cloud-computing services. Its closest U.S. analog is Amazon, only bigger.
For media watchers, however, the more interesting issue behind Alibaba’s filing will be what it means for Yahoo. Despite all of Yahoo CEO Marissa Mayer’s efforts to revive and reshape her lumbering U.S. online giant, it has been the company’s Alibaba stake that has buoyed Yahoo’s shares in recent months to reasonable levels. The IPO itself will likely far exceed the placeholder $1 billion amount in Alibaba’s paperwork, and is widely expected to come in at a level that would exceed the year’s biggest stock offering so far, of $15 billion. But speculators have invested in Yahoo as basically a tracking stock in the Chinese company ahead of the IPO. Now that the IPO is more than just a rumor, that value will be fully realized, and Mayer …
Yahoo owns about 24% of the Chinese e-commerce company, and its shares are up more than 4.5% to $39.24 in mid-day trading following Alibaba‘s plan to list on the New York Stock Exchange — possibly raising as much as $15B. “This will make us a more global company and enhance the company’s transparency, as well as allow the company to continue to pursue our long-term vision and ideals,” Alibaba said yesterday. Yahoo has a lot at stake. Assuming that Alibaba is worth about $190B, Bernstein Research’s Carlos Kirjner estimated in January that Yahoo’s holding accounts for about $24 of the value for each of its shares. But investors know relatively little about Alibaba’s financial performance, and some fear that it’s been too slow to take advantage of sales made via smartphones and tablets in China. Those concerns were exacerbated recently when the government there refused to approve its mobile phone payment process. With revenue growth slowing, and profit margins slipping slightly, BGC Financial’s Colin Gillis warned in January that “the Alibaba metrics may dampen some of the fervor surrounding” Yahoo. Alibaba would have to disclose a lot more information following an IPO in the U.S., and that may mean it feels confident that investors will like what they see.