This article has been updated and originally appeared on Real Money on Nov. 1, 2016.
With major U.S. online video services largely shut out of China and Beijing spending heavily to grow broadband penetration, Alibaba (BABA) sees a big opportunity to create a Chinese streaming giant. And while the company still faces a couple of deep-pocketed rivals, its assets and spending commitments leave it a force to be reckoned with.
Alibaba announced on Monday that it's creating a new business unit that features online video leader Youku Tudou (acquired earlier this year for $3.5 billion), the Alibaba Pictures film studio and the UCWeb mobile web browser unit, in addition to the company's music, gaming and literature businesses. Yu Yongfu, formerly the head of Alibaba's mobile unit, will head the business.
(On Tuesday morning, the Chinese Internet giant reported better-than-expected earnings of 79 cents per diluted share for the third quarter, topping analysts' estimates of 69 cents per share. Revenues clocked in at $5.14 billion, beating analysts' estimates of $5.03 billion, as the company's cloud computing business reported big gains. Shares of Alibaba were up 0.6% to $101.71 Wednesday morning).
In tandem with the video assets move, Alibaba announced that it is launching a new $1.54 billion entertainment fund to finance new projects. The fund follows an October deal with Steven Spielberg's Amblin Partners through which Alibaba obtained a stake in Amblin and agreed to co-produce movies for global audiences.