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Online Film Production in China Using Blockchain and Smart Contracts pp 127–181Cite as

Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance

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Part of the International Series on Computer Entertainment and Media Technology book series (ISCEMT)

Abstract

This chapter stands as a transition between the Chinese political-economic and media macro-contexts and the micro-contexts of film production and creative talents. Through the lens of Alibaba Pictures and following Peterson’s framework, I analyse the organisational process and the change in business cultures within the Chinese corporate media world. I argue that this change directly affects the development and programming of content. In addition, Alibaba’s (and Tencent’s) recent embrace of blockchain and smart contract technologies may further transform the creative industries (Zen 2018; Zhao 2018).

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Fig. 5.1
Fig. 5.2
Fig. 5.3
Fig. 5.4

Notes

  1. 1.

    For further details on the chronology of Alibaba Groups’ developments, please refer to the timeline in Appendix 3.

  2. 2.

    Alibaba Online, the first version of Alibaba.com, was officially launched in December 1998.

  3. 3.

    A much more elaborate version of China Pages, the first company created by Jack Ma in 1995.

  4. 4.

    The structure that was ultimately accepted by the SEC, supposedly very conservative, was not originally accepted by the Hong Kong Stock Exchange. It is unclear whether it is because Hong Kong did not want to infringe its rule of law or because China wanted Alibaba to be integrated with the US and the global economy and advised Hong Kong to refuse the listing as a reason to access the NYSE.

  5. 5.

    The fact that ANT Financials and Alipay is essentially a Chinese bank with control over Chinese nationals is what motivated Alibaba Group and the Chinese Government to limit the shareholders’ ownership.

  6. 6.

    This was not the first time that Alibaba Group was opening offices in the US, where it already had five offices in Seattle, San Mateo, San Francisco, New York, and Washington DC (Wang 2015a).

  7. 7.

    These rather precarious ‘jobs’ however, would mostly consist in transforming users into sole traders of goods and products, probably by taking over of a lot of e-Bay existing trades.

  8. 8.

    It may not be a coincidence that Jonathan Lu moved on to train new Alibaba talents from ‘within’ and help to ‘develop the next generation of leaders’. Rather than a rebuttal, Jonathan’s change of role mirrors the way the CCP leaders and heads of the Chinese Government rotate in power. It is done in a gradual and collective manner with a consensus from the other members towards a planned agenda of the existing structure – The boundaries of this structure are represented by the Group for Alibaba executives. It could be argued that the political structure of China may have a lot of similarities with corporatist power structures.

  9. 9.

    Although he recently announced his plans to retire from Alibaba in 2020 to concentrate his energy on philanthropic activities and education (Chen 2018).

  10. 10.

    One of Alibaba’s early corporate funders.

  11. 11.

    Wang Jianlin had served as general for the People’s Liberation Army (PLA). Wang’s father also fought alongside Mao (Chinese: 毛泽东 [Mao Zedong]) during the Long March (October 1934–October 1935). CEO of Tencent.

  12. 12.

    CEO of Tencent.

  13. 13.

    CEO of Youku Tudou.

  14. 14.

    The Ministry of Foreign Trade runs the CIECC and it is in charge of credit assessment, electronic payments and Internet security with projects aimed to reduce cash transactions. Its influence extends to the Asia-Pacific region and it has a UN representation (CIECC 2001).

  15. 15.

    The CCP realises that the story of Jack Ma as a self-made man is a positive and uniting aspiration for its population. It serves a soft power function abroad and fits with Xi Jinping’s ‘China Dream’ communication strategy seen in Chap. 3. The party sometimes shows its affiliation with popular figures such as the NBA player Yaoming or Jackie Chan to soft the edges of its hard-stance policies.

  16. 16.

    For instance, he is now the chairman of The Nature Conservancy’s China Program.

  17. 17.

    This role seems to have played against Wang Jianlin recently when the government limited his Western take over ambitions and over-leveraged debt positions in real estate.

  18. 18.

    The early supervision of Alibaba Pictures Group by a former cadre from China Film Group shows the strategic importance of media and the creative industries for Alibaba Group’s strategy and beyond this, for the Chinese Government’s agenda of controlling media both in China and abroad (As seen in Chap. 3).

  19. 19.

    With the acquisitions of Yueke (entertainment ticketing website), Taobao movie, film ticketing platform Tao Piao Piao, or Yulebao (C2B crowdfunding platform), for instance.

  20. 20.

    Bill Kong’s company, Edko, was the key driver of the worldwide success Crouching Tiger, Hidden Dragon (Lee 2000). Media Asia were the Producers of Infernal Affairs (Lau and Mak 2002), revisited by Martin Scorsese into Oscar winning film The Departed (Scorsese 2006).

  21. 21.

    The list is long since the Hong Kong New Wave: John Woo, Wong Kar Wai, Johnnie To, Patrick Tam, Peter Chan, etc.

  22. 22.

    Some industry professionals have argued that the higher management of Alibaba, including Jack Ma himself has very little knowledge about the realities of the film business, which can create tensions with the professionals and experts who Alibaba Pictures has hired to support its expansion plans into the film industry. This is the case with some of the management of Alibaba Pictures in the US who have shared their desire to resign in the close professional circles of the industry.

  23. 23.

    As seen previously, Jack Ma is a very different character from Wang Jianlin (CEO of Wanda Group). This will be further developed in Sect. 5.4.3.

  24. 24.

    Fan Bingbing has since had issues by the Chines goverment over tax matters.

  25. 25.

    This will be further developed in Sect. 5.4.3.

  26. 26.

    It may remind the reader of the propaganda system under Mao that used free media platforms such as press, television and cinema to disseminate its messages to the widest audience.

  27. 27.

    Although the fact is that Alibaba’s acquisition of the newspaper may have somewhat discredited the outlet’s integrity and defeated the purpose of buying it in the first place. The fact is that the newspaper is now in full control of Alibaba Group and the Chinese Government.

  28. 28.

    This is where Lobato identifies one of the faces of piracy and counterfeiting as ‘free enterprise’ (Lobato 2012, 69–94). The wealth and jobs that piracy and counterfeiting create tend to entertain corruption, but they also contribute to the ultimate stability of the country as explained in Chaps. 2, 3, and 4.

  29. 29.

    Including books, documentaries, videogames and merchandising items sold online, in shops, and in the theatres.

  30. 30.

    The name of this new platform has not been revealed yet.

  31. 31.

    As seen in Chap. 3, the rule of law is a Western concept that has culturally and structurally conflicted with the Chinese system in place.

  32. 32.

    On the opposite of former PLA Officer Wang Jianlin, Jack Ma may, at least at first sight, be a key factor of progressive change in China.

  33. 33.

    Autonavi is a subsidiary of Alibaba and handles geolocation by GPS. Autonavi’s CEO is currently the head of the Alibaba digital entertainment group.

  34. 34.

    This was an explanation why Alibaba had to move its headquarters from Hangzhou to Beijing to facilitate this tight monitoring process.

  35. 35.

    While other chains such as Vechain have been created to tackle the counterfeits issue, Alibaba’s interest in blockchain technology to fight counterfeiting through a systematic and transparent identification of its vendors and registered products is growing. An Alibaba official confirmed this during an interview in Alibaba’s office December 2017. This view was also expressed publicly by Jack Ma in broader terms (CNBC 2017).

  36. 36.

    Its rival Tencent took a similar step with its platform TrustSQL. Baidu also started working on its own blockchain solutions (Super Chain).

  37. 37.

    Alibaba is developing a crypto wallet, which would benefit the Filipino workers in Hong Kong transferring funds cheaper and faster back home. It has also registered 90 blockchain patents (one of the highest in the world) ahead of IBM that had 89 patents as of 3rd September 2018.

  38. 38.

    Some blockchain experts challenged this view when Consensys (a US/Swiss-based technology company created to develop Ethereum-based solutions) signed a Memorandum of Understanding (MOU) with the Xiongan local government for their smart city project in July 2018 (Yakubowski 2018). This event of a foreign company consulting in China for blockchain technology was sensationalised in online newsgroups such as Coin Telegraph and assumed that the MOU meant an official agreement and that decisions taken at local level were as significant as those taken at national level. However, as seen in Chaps. 3 and 4, the government is not uniform and decisions occur from a top-down highly hierarchised structure. Therefore, this event does not mean that Tencent blockchain project or NEO have lost their quasi-status of chosen blockchain platforms for China – NEO’s rather centralised structure of seven nodes (compared to Bitcoin’s c. 11,700 nodes in January 2018) makes it easier for the government to control the chain.

  39. 39.

    The decentralised features of blockchain technology and its applications poses a threat to the centralised political-economic nature of the Chinese Government and its banking system as much as its corporate and centralised online media sector (BAT).

  40. 40.

    As it had been the case already with Yahoo.

  41. 41.

    This is particularly relevant with Alibaba’s listing on the NYSE where it had the largest Chinese IPO at the time.

  42. 42.

    Jack Ma did not study abroad. He says himself that he has been influenced by Western culture and publicly claims his interest for rock and pop cultures.

  43. 43.

    China Film Group and Huaxia are still the only two companies that can officially acquire foreign content.

  44. 44.

    Although when looking at the blatant example of Foxconn and other exploitative Chinese corporations, it seems that many Chinese companies do not seem to have such preoccupations (Chamberlain 2011).

  45. 45.

    As a matter of fact, Alibaba’s share price has significantly increased since the 2014 IPO (Mac 2014; Market Insider 2017).

  46. 46.

    This was evidenced by recent talks from Fosun Group at the Cultural Industries Global Forum, Conrad Hotel, Hong Kong on the 6th of June 2016.

  47. 47.

    Also known as ‘11/11’, a nationwide shopping event created by Alibaba.

  48. 48.

    To that extent, it is worth mentioning that Alibaba is increasingly looking at the possibility to provide such merchandising with the use of 3D printing. This would mean lower logistical costs and higher margins for the company in the long-term. It would also mean less factory jobs.

  49. 49.

    This is a strong incentive for Alibaba to take down film piracy and counterfeited items wherever it may suit the company’s agenda.

  50. 50.

    As seen in Chaps. 2 and 3.

  51. 51.

    After it open new ones in Beijing to comply with the government guidelines including the request to integrate police offices in all online platform headquarter sites (Custer 2015).

  52. 52.

    https://www.bigheartsmallfilm.org/

  53. 53.

    Interview with an Alibaba Executive in December 2017.

  54. 54.

    The existence of Satoshi Nakamoto has remained a mystery: it is infused with controversy as he supposedly disappeared shortly after the circulation of his paper that was based on several other major cryptographic works.

  55. 55.

    Its rivals Tencent and Baidu took a similar step with their respective platforms TrustSQL and Super Chain.

  56. 56.

    But these plans along with cross-border payment solutions are so far only developed in a private chain context.

  57. 57.

    Alipay’s aspirations to become a central worldwide payment platform have since been challenged by a political-economic stance from the US that led to Alibaba’s failed deal with MoneyGram on January 2, 2018 (Balakrishnan 2018; Soo 2018).

  58. 58.

    Now rebranded Breaker from February 1, 2019 (Breaker.io).

  59. 59.

    The motivation regarding retail investors’ protection is probably also combined with the difficulty for governments to impose taxes on unregulated tokens that are not considered as real assets.

  60. 60.

    As per July 2017, Ethereum (ETH) is the second largest crypto-coin per market valuation after Bitcoin (BTC).

  61. 61.

    Ripple (XRP) was designed and implemented to be regulated by a cartel of major international banks involving JP Morgan and Goldman Sachs for instance.

  62. 62.

    http://docs.neo.org/en-us/index.html

  63. 63.

    In a decentralised blockchain system, the majority of the network (not one single monopolistic entity) validates transactions and contracts.

  64. 64.

    Paul Baran’s 1964 diagram (www.cybertelecom.org/notes/baran.htm).

  65. 65.

    A similar approach to Amazon in the US.

  66. 66.

    This may require blockchain and smart contracts to avoid piracy issues.

  67. 67.

    Alibaba has also explored 3D printing as a way to improve the sale and delivery of merchandised items associated with a particular IP.

  68. 68.

    Cypher-punks, a tribute to the Cyber-punk literature led by Philip K. Dick, are the early developers who implemented the vision of Satoshi Nakamoto’s white paper.

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  1. Run Run Shaw Creative Media Centre, City University of Hong Kong, Kowloon Tong, Kowloon, Hong Kong

    Patrice Poujol

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Poujol, P. (2019). Alibaba Pictures: An Illustration of Changing Business Cultures and Film Finance. In: Online Film Production in China Using Blockchain and Smart Contracts. International Series on Computer Entertainment and Media Technology. Springer, Cham. https://doi.org/10.1007/978-3-030-02468-0_5

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