Alibaba Buys $30 Million Stake In S.M. Entertainment
Alibaba has formed a strategic partnership with South Korea's S.M. Entertainment in music industry.
According to Forbes, Alibaba Group Holding has formed a strategic partnership with S.M. Entertainment (South Korea’s top entertainment agency). The announcement came on Thursday where it was cleared that the Chinese tech giant has bought a $30 million stake in the agency. Alibaba has just bought the newly issued shares of S.M. Entertainment valued at $30 million, which resulted in 4% gain in stake in the Kosdaq-listed company.
The statement issued by K-Pop Giant S.M. Entertainment stated, “Through this partnership, we’ll synergize in various fields, including China’s digital music industry. We’ll continue to localize and expand our business in China.”
Alibaba Group recently disclosed information about its new music streaming division called AliMusic and its music streaming apps ‘Xiami’ and ‘Tiantian’. Alibaba actually invested and bought minority stake in the South Korean entertainment agency so it can push in several popular Korean pop groups. It will be promoting its music division and apps through this strategic partnership.
The artists of S.M. Entertainment include EXO and Girls’ Generation. Both artists are considered as big names in the music industry of the region. They have been listed in Forbes Korea Power Celebrity 40 for two consecutive years now.
Alibaba came up with AliMusic in July last year as a part of its plan to expand its footprints in the online music industry. It is clear that the Chinese tech firm does not only want to dominate the e-commerce market but wants to make an impact in all potential markets.
The company is a big name in cloud computing industry and it is slowly making its way in movies and music industries. For that matter, it owns and operates Youku Tudou, which is known as China’s YouTube.
Through this strategic partnership, Alibaba will get convenient access to a few top expertise in online music marketing and distribution. S.M. Entertainment videos that are present on YouTube have more views (3.8 billion views) than Bruno Mars and Lady Gaga.
K-Pop company reported an increase in profits by 41%, which brought them up to $30 million in the first three quarters of 2015 ending November. The revenues jumped by 14% to $200 million. The entertainment agency said that the massive growth in profits and revenues was because of the increased revenue that it generated from China and Japan. S.M. generated $10 million alone from China in the second quarter. This is a valuable opportunity for Alibaba.
