Alibaba (NYSE:BABA) is carrying out a strategic review of its video streaming platforms Youku and Tudou, Bloomberg News reported citing people with knowledge of the matter.
One of the options under discussion is to fuse the assets into Alibaba Pictures Group and strengthen the business scope of the company.
The move is part of the Chinese e-commerce giant’s efforts to reorganize its business as in March the company announced plans to split into six main parts, including e-commerce, media and cloud computing. With its Q4 results in May, then Alibaba CEO Daniel Zhang announced that the board had approved a full spin-off of the company’s Cloud Intelligence Group. The company is reportedly exploring IPO for its logistics and grocery arms.
In China, Youku is in competition with Baidu’s (BIDU) iQiyi and Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) and rivals have spent billions on acquiring content and creating original series, a move similar to that done by Netflix (NFLX) to gain market share, the report added.
However, this approach by the Chinese companies led to a price war proved unsustainable for the companies.
The discussions are at an early stage and Alibaba may explore other options, which may include separate listing for the video entertainment assets or not to go ahead with any transaction, the report noted citing the sources.
Alibaba Pictures is a film and television company driven by internet and its services include content production, internet publicity and distribution, theater ticket management and data services, among other things. The platform is a vertical business of Alibaba Culture and Entertainment Group, according to its website.
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