Earlier this week, e-commerce giant Alibaba announced that it had acquired a minority stake in Amblin Partners, the content creation company formed by Hollywood director Steven Spielberg last year. As part of the deal, the two companies plan to jointly produce and market about six to nine movies a year.
"Among Chinese consumers, there is an increasing demand for premium global content," said Alibaba founder Jack Ma, in an emailed statement to Bloomberg. "This collaboration can serve as a cultural bridge and have a positive impact on the next generation of Chinese consumers."
Financial terms were not disclosed. Neither Alibaba nor Amblin Partners could be immediately reached for comment.
The move is a coup for both companies. With Alibaba, Spielberg's group gets the opportunity to crack into the increasingly attractive Chinese film market. Last year, it saw nearly $7 billion in box office sales last year, making it the second biggest market in the world (trailing behind the U.S., which brought in around $11 million in 2015).
Still, local restrictions can often make it difficult to navigate. A number of U.S. studios have lately struck up deals with Chinese partners to circumvent a government cap on foreign films. Meanwhile, Alibaba gets access to a Hollywood powerhouse, as it makes a greater push to expand its global footprint and capture a piece of the U.S. entertainment market.
On a buying spree
The Amblin partnership may be splashy, but it's certainly not the first U.S. investment for Alibaba. Over the past several years, the company has invested serious cash in U.S. startups, in industries like transportation, social media, and augmented reality. Last year, it invested $200 million into Snapchat, the disappearing messages app that is now said to be planning for an IPO. Some speculate that Alibaba may be interested in developing cross-border payments through the app (though Snapchat is currently banned in China).
And earlier this year, Alibaba led a more than $793 million funding round in Magic Leap, a virtual reality startup that clinched a $4.5 billion valuation -- despite having yet to come out with an actual product.
A likely friendship, as directors cozy up to tech firms
It's likely that Alibaba and Amblin will collaborate on projects involving virtual reality. Spielberg has called virtual reality the "latest and maybe greatest" invention in entertainment, according to a Wall Street Journal report.
He isn't alone. Across Hollywood, filmmakers are increasingly recognizing the potential of VR and VR startups. Jon Favreau, the director behind hits like The Jungle Book and Iron Man, recently spearheaded a new, interactive project called Gnomes and Goblins, available to preview on Steam, Viveport, and Wevr Transport. In an interview with ReCode's Kara Swisher, Favreau explained why he sees VR as the next big landscape for storytelling:
"At its best, it [VR] feels like lucid dreaming. But you have agency, and you know it," Favreau said. "So imagery becomes very impactful. There is some internal rule system, but it doesn't apply to the same rules you deal with in waking life." The director added that he's bullish on the possibility of working with tech companies like Google, Facebook and Netflix to distribute his work.
Penrose Studios, a film production company based in San Francisco, has agreed with Favreau's assessment. The company recently singed a deal with Google to develop custom content for the Daydream VR headset.
"When people think of film, a lot of times they think of live action. We're really excited about the possibilities of CG [computer generated imagery,]" said Eugene Chung, the company's founder and CEO, in a recent interview with Inc.