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."
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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.