Since this year, especially in the third quarter, the film industry has collectively entered a “cooling-off period.” According to statistics, the country's total movie box office fell 9.51% year on year in the first half of the year, and this figure for the third quarter fell 43.8% year on year; in the first three quarters, more than 70% of A-share film and television companies both lost revenue and profits, and more than 60% fell into losses.

But on the other hand, the entire industry is still trying to find breakthroughs. We saw that Alibaba Pictures handed over a different questionnaire, which may have inspired the industry.

According to the 2024/25 semi-annual results disclosed by Alibaba Pictures, as of September 30, 2024, it achieved revenue of 3.051 billion yuan, an increase of 17% over the previous year; adjusted EBITA reached 0.642 billion yuan, an increase of 39% over the previous year, and net profit of 0.337 billion yuan. Furthermore, this is based on continuous growth, which further reflects the high quality of growth.

At a time when the market is bleak, this kind of performance seems particularly difficult, and it is also worth discussing: How can Alibaba Pictures achieve resilient growth?

Maintain strategic strength and turn resistance into motivation

Looking at it from the top down, first of all, Alibaba Pictures did the right thing: maintain strategic strength.

Alibaba Pictures has long been pursuing a “content+technology” two-wheel drive strategy, while diversifying the industrial chain to continuously accumulate potential and enhance internal certainty. In today's complex market environment, this potential has even been better unleashed, turning resistance into a driving force for growth.

For example, from an industry perspective, the slump in movie market performance this year is not unrelated to the absence of high-quality content. Among them, in the third quarter, important summer vacation programs experienced an obvious shortage of films. According to Lighthouse Pro data, the total box office of the summer program was 11.643 billion yuan, which is only half of last year's 20.63 billion yuan. Furthermore, many box-office hits such as “Give It All”, “The Girl Who Disappeared”, “Fengshen Part 1”, and “Three Thousand Miles to Changan” appeared in the summer program last year. The only film that grossed 3 billion yuan this year was “Catch the Doll.”

At the same time, at the level of publicity, the film industry has fallen into modelling and homogenization, rarely bringing fresh and high-quality experiences to the audience, and not leveraging the market well.

And these are at the core of Alibaba Pictures's strategy, including high-quality content, innovative promotion that can be created based on technology and diversified business layouts, etc., thus laying the foundation for growth.

Profound results from two directions to lock in growth

At the strategic level, it can be seen that Alibaba Pictures has achieved results in the following two directions. This is also the key to its continued growth in the future.

1. Maintain the output of high-quality, differentiated and diversified content

Alibaba Pictures has always maintained the output of high-quality content, and has a unique vision of investment and production. The main films involved in production and distribution during the period include 47 movies including the summer vacation box office winner “Catch the Doll”, the high-quality film “Murder”, and helped promote the Qingming winner “What kind of life do you want to live”. The cumulative box office accounted for nearly 60% of the total box office.

Furthermore, it is worth noting that behind this, Alibaba Pictures helped a number of imported films gain the largest ticket office in China, thereby increasing the abundance of supply, strengthening the main promotion status, and achieving differentiated competition.

For example, “What Kind of Life Do You Want to Live” was first screened in China as Hayao Miyazaki's new film, and was Miyazaki's “farewell film”, setting a box office record in Qingming film history; “Grandma's Grandma's Grandson” won the world's largest box office in the mainland China film market.

Alibaba Pictures is also still rich in content reserves. Most of the projects to be screened are market-leading masterpieces, including “East Pole Island,” “When the Stars Shine,” “Catch the Agent,” and “Dart Man: The Wind Rises”, and “Dart Man: The Wind Rises in the Desert”, and “Chinese blockbusters” with a sense of quality, diverse, and innovative. Among them, “The Good Thing” had a huge hit, with Douban scoring as high as 9.1, and was a box-office hit, winning the most popular spot in the same period. The film will officially be screened on November 22. It is worth looking forward to whether this film will become the next hit.

In addition, Alibaba Pictures is steadily developing content production for series and performances to guarantee the supply of diverse content and gradually expand its influence on diverse racetracks. For example, it can be seen that Barley has formed Barley Mailive. Of course, there are five major homemade content brands, including shows, shrimp music entertainment, art shows, Hongtu, and Cool Wheat, covering concert, music festivals, dramas, exhibitions, etc., and during the period, many high-level performances such as the 2024 Anaya Shrimps Music Festival, Mo Wenwei's “Big Show” concert, and the stage play “Magic Moments” were launched.

With the support of the advantages of dual business scenarios, Alibaba Pictures has also been able to create a high-quality case for joint promotion of film performance IP. In the “What kind of life do you want to live” project, based on film collaboration, Damai and Studio Ghibli co-produced the Studio Ghibli Immersive Art Exhibition, which was exhibited in Shanghai; at the same time, the film “Only This Turquoise”, which was produced and co-distributed by Alibaba Pictures, also began pre-sale in September this year. For the first time, Damai participated in the film project as a co-distributor, and at the same time, Ticketing and Damai platforms deeply linked, innovated and promoted the two major audiences of movies and dance dramas.

The three characteristics of quality, differentiation, and diversification have also jointly created the unique content advantages of Alibaba Pictures and brought strong certainty.

2. Consolidate the platform service ecosystem and unleash development potential collaboratively

The current financial report also revealed a major highlight. Alibaba Pictures's ticketing and technology platform business grew significantly, with revenue reaching 0.23 billion yuan, an increase of 0.71 billion yuan over the previous year.

This is also an intuitive reflection of Alibaba Pictures consolidating the platform's service ecosystem. Furthermore, behind this, it can not only tap the increase in the business itself, but also unleash potential in collaboration, bringing more full momentum for growth to the group.

Specifically, on the one hand, Alibaba Pictures's dual ticketing platforms went hand in hand and launched an overseas layout, which combined to bring more growth points. Among them, Taomai's VIP membership benefits and brand influence continued to expand, and the activity and loyalty of users on the Taomai platform continued to increase, and Damai steadily maintained its leading position in the performance ticketing market. GMV achieved rapid growth of more than 50% during the period, using ticketing system development to develop business in Hong Kong, Macao and overseas; Phoenix Yunzhi's business maintained the highest number of ticketing cinemas and ticketing numbers in the country, and promoted the layout of Hong Kong, Macao and overseas markets.

Taken together, the development of each platform will positively catalyze other platforms in the service ecosystem, thereby accelerating the rotation of the growth flywheel.

On the other hand, Alibaba Pictures has more diverse technology application scenarios. It continues to increase investment in innovative technology fields such as AI, digital humans, and virtual shooting, greatly improving operational efficiency and empowering publicity, etc. For example, during the period, virtual studios have been built in various places, and virtual shooting technology has begun to be applied in some film and series projects, and the Tongyi Thousand Questions model has been connected to the Lighthouse AI, which has brought more help to publicity and the release of content potential.

In summary, Alibaba Pictures has become a stable development structure in terms of content production, ticketing services, and entertainment industries. The advantages of the industrial chain are gradually becoming prominent. In the future, as the film market recovers, Alibaba Pictures will release greater growth momentum and push the company into a new upward cycle.