Alibaba Group (NYSE:BABA) is currently examining possibilities for its video entertainment assets as part of its ongoing structural revamp, according to sources familiar with the matter.
The company is conducting a strategic review of its video streaming platforms, Youku (NYSE:YOKU) and Tudou.
One option being considered is to integrate these assets into Alibaba Pictures Group, a move that would expand the business scope of the Hong Kong-listed company, Bloomberg reported.
Deliberations regarding Alibaba's video entertainment assets are still in the early stages, and the company may explore other options, including a separate listing for the platforms or deciding not to proceed with any deal.
In the Chinese market, Youku (NYSE:YOKU) competes with rivals such as Baidu's iQiyi and Tencent Holdings (HKG:0700, OTC:TCEHY). These companies had previously engaged in fierce competition, which led to an unsustainable price war and financial losses for the players involved. iQiyi, for example, has shifted its focus towards boosting subscriptions with higher-quality content.
Alibaba Pictures, involved in content production, promotion, distribution, cinema ticketing management, and data services for the entertainment industry, has been behind several successful Chinese films such as "Wolf Warrior 2," "The Wandering Earth," and "Dying to Survive." The company also made investments in the Oscar-winning movie "Green Book" in 2019, which received accolades for Best Picture, Supporting Actor, and Original Screenplay.
The review of the video platform assets aligns with Alibaba's larger plan to restructure its operations and stimulate growth. Last month, the company announced a surprising leadership shakeup, with Daniel Zhang, the CEO of eight years, being replaced.
Contact Angela at angela@proactiveinvestors.com
Follow her on Twitter @AHarmantas