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Not even Steven Spielberg is immune to Chinese moves into Hollywood.

Hollywood's highest-grossing director is teaming up with Jack Ma's Alibaba Group Holding Ltd. in a partnership that will help Mr. Spielberg's Amblin Partners produce, finance and distribute movies, the companies said Sunday.

Amblin and the e-commerce company's movie business, Alibaba Pictures Group Ltd., said their alliance will help Mr. Spielberg's company distribute its movies in China, while Alibaba, in turn, will rely on Amblin to become a bigger part of Hollywood's production and distribution scene.

Alibaba Pictures will take a minority equity stake in Amblin and gain a seat on its board. The companies didn't disclose financial terms of the deal.

The partnership is the first in China for Amblin, formerly DreamWorks Studios, which will also gain access to Alibaba's large trove of data on Chinese consumers, an Alibaba spokeswoman said.

To celebrate the alliance, Mr. Ma and Mr. Spielberg held a conversation on a hotel-ballroom stage in Beijing on Sunday, during which they said the two companies will promote values shared by both the East and the West.

"We can do co-productions between our company and your company, and we can bring more of China to America, and more of America to China," Mr. Spielberg said.

Mr. Ma, executive chairman and founder of Alibaba Group, said: "I don't see any human-value difference between West and East. The only difference is the West can tell the story better than Chinese."

The Amblin-Alibaba tie-up comes as China's already large appetite for getting into blockbuster action—from movie producing to cinema ownership—continues to grow, and Hollywood is eager for greater access to the hard-to-navigate Chinese market.

Chinese box-office sales are No. 2 in the world, behind the U.S., and Chinese investors have poured money into film ventures from the U.S. to Europe.

Leading the way is Chinese conglomerate Dalian Wanda Group—owned by Wang Jianlin, the only Chinese entrepreneur richer than Mr. Ma. Wanda has purchased U.S. theater chain AMC Entertainment Holdings Inc. and production company Legendary Entertainment, and is in the process of buying Dick Clark Productions.

Alibaba Pictures has amped up its investments in the past year, partially bankrolling "Star Trek Beyond," which pulled in more than $20 million in its first week of Chinese release in September, and "Mission: Impossible-Rogue Nation," starring Tom Cruise.

Distribution partnerships with Chinese firms have become increasingly important for Hollywood studios, since they have little control over how a movie is marketed or released in China. Sony Corp.'s Sony Pictures Entertainment Inc. signed a deal with Wanda last month to market Sony movies across Wanda's vast holdings, and several Hollywood executives who have left studio jobs have secured production deals backed by Chinese investors.

DreamWorks re-formed as Amblin Partners last year after receiving more than $800 million in equity and debt and signing a distribution deal with Comcast Corp.'s Universal Pictures. The fund infusion—led by Participant Media, India's Reliance Entertainment, Entertainment One and Mr. Spielberg himself—gave the struggling company new life after years of box-office disappointments and low output.

The first movie released under the Universal agreement, "The Girl on the Train," opened at No. 1 at the box office this weekend. Mr. Spielberg said at the time of the fundraising that he planned to resurrect some of his beloved franchises and produce sequels to the 2015 blockbuster "Jurassic World."

Any revival of Mr. Spielberg's previous blockbusters would open in a global market that's increasingly reliant on Chinese moviegoers. The Chinese box office is expected to be No. 1 in the world in the next few years.

The Chinese market is also emerging as a place to make up for lost ground if a movie fares poorly in the U.S. Summer releases "Warcraft" and "Now You See Me 2" both had disappointing attendance in North America, for example, but were hits in China, though studios collect a smaller portion of box-office revenue from Chinese cinemas. DreamWorks' own "Need for Speed" was one of the first titles to alert Hollywood to this new lopsided trend when it collected $66 million in China and $43 million in North America in 2014.

Mr. Spielberg's "The BFG," which opens in China on Friday, will hope for a similar dynamic. The adaptation of the beloved Roald Dahl children's book underperformed in North America, collecting a paltry $55.4 million against a $140 million production budget. The Walt Disney Co. release has collected an additional $120 million from overseas markets so far.

At the end of Sunday's event, a promotional image for "The BFG" was flashed on the ballroom's large screen.

Jeff Small, president and co-CEO of Amblin, said at the event that, in mapping out its strategy for a larger China presence, his company realized it wanted a partner that could serve as a guide and which had a "deep bond with and knowledge of Chinese people."

Alibaba Pictures has access to reams of information on Chinese consumers. It runs an online ticketing platform, and its parent runs China's biggest e-commerce platforms, with 500 million users.

Net losses at Alibaba Pictures, which is publicly traded in Hong Kong, have added up. The firm reported nearly 466 million yuan ($70 million) in net losses for the six months ended in June, up from about 152 million yuan in the first half of 2015. It said an increase in marketing expenses related to its online movie-ticketing platform was a primary factor. Content-acquisition costs and production spending also have kept the company from turning a profit in the past.

One shared prospect for Alibaba Pictures and Amblin is the developing field of virtual reality. Mr. Spielberg called virtual reality "the latest and maybe the greatest" kind of format for entertainment content in the future. Mr. Ma said mobile phones and the Internet of Things will allow movies to be found in cinemas and "all kinds of channels." He said: "My job is using technology to support and empower these guys."

Write to Alyssa Abkowitz at alyssa.abkowitz@wsj.com and Erich Schwartzel at erich.schwartzel@wsj.com

(END) Dow Jones Newswires

October 09, 2016 21:35 ET (01:35 GMT)

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