Look out, Amazon: Another e-commerce giant is looming in home entertainment

In business as in life, imitation is the sincerest form of flattery.

Alibaba, Amazon's China-based ecommerce rival, is planning to spend more than $7 billion on its entertainment division over the next three years, according to a memo obtained by Reuters.

The move would add yet another player to what has become a crowded and pricey entertainment industry that includes traditional movie studios and TV networks as well as newer entrants like Netflix, Amazon, Hulu, with major players like Facebook, Google and Apple also waiting in the wings.

Amazon has already spent billions of dollars on music and TV content despite the company's core businesses revolving around ecommerce and cloud computing. Still, Amazon has built up a considerable video operation that is included with its Prime membership — one that is growing as fast or faster than any other video service.

The introduction of these new competitors led to more than twice as many original scripted TV shows in 2016 than in 2009.

The addition of Alibaba — and its immense checkbook — could add even more fuel to the fire.

In the internal email, Alibaba Digital Media and Entertainment Group CEO Yu Yongfu wrote "he didn't come to play."

RELATED: Amazon's best-selling products of 2016:

19 PHOTOS
Best sellers on Amazon of 2016
See Gallery
Best sellers on Amazon of 2016

1. Hamilton (Original Broadway Cast Recording)

BUY IT
2. Traveller by Chris Stapleton
BUY IT
3. 25 by Adele

BUY IT
1. Harry Potter and the Cursed Child by J.K. Rowling
BUY IT

2. StrengthsFinder 2.0 by Tom Rath

BUY IT
3. First 100 Words by Roger Priddy
 
BUY IT
4. Oh, The Places You’ll Go! By Dr. Seuss
BUY IT

5. The Life-Changing Magic of Tidying Up by Marie Kondo

BUY IT
1. The Girl on the Train by Paula Hawkins
 
BUY IT
2. The Girl in the Ice by Robert Bryndza
BUY IT
3. Harry Potter and the Cursed Child by J.K. Rowling
BUY IT
1. Pokemon Moon - Nintendo 3DS
BUY IT
2. Pokemon Sun - Nintendo 3DS

 
BUY IT

3. Uncharted 4 - Playstation 4

BUY IT
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

It's unclear what kind of content Alibaba will be investing in, though it would make sense for it to be focused on the Asian markets in which it is dominant. Entertainment already accounted for 11% of Alibaba's second-quarter 2017 revenue thanks to its 2015 acquisition of Youku Tudou, China's equivalent of YouTube. Youku Tudou also already has dipped a toe in scripted series with shows like Just One Smile Is Very Alluring.

Alibaba is the kind of company that can spend $7 billion on a relatively small part of its business because, like Amazon, it is already a giant with even bigger ambitions. The company has grown rapidly, generates a ton of cash, and has made a series of major acquisitions that has positioned it as a global power. The company is even on its way to dominating digital advertising in China.

A representative for Alibaba did not immediately respond to a request for comment.

Read Full Story

Markets

NASDAQ 6,426.92 4.23 0.07%
S&P 500 2,502.22 1.62 0.06%
DJIA 22,349.59 -9.64 -0.04%
NIKKEI 225 20,296.45 -51.03 -0.25%
HANG SENG 27,880.53 -229.80 -0.82%
DAX 12,592.35 -7.68 -0.06%
USD (per EUR) 1.19 0.00 0.02%
USD (per CHF) 0.97 0.00 -0.08%
JPY (per USD) 111.99 -0.46 -0.41%
GBP (per USD) 1.35 -0.01 -0.62%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.