Chinese streaming site iQiyi to spend half its 2016 budget on 40 new shows as market heats up
All of the shows will be local content aimed at paying subscribers, company says
Chinese streaming site iQiyi will spend half of its total budget next year producing more than 40 new shows, it said on Thursday.
The move suggests that the cash-burning race in the country’s video-streaming industry is likely to continue as more Chinese show their willingness to pay for online content.
All of the new shows will be Chinese and mostly aimed at paying subscribers, said a spokesperson for the company.
Created by Chinese search giant Baidu in 2010, iQiyi ranks as one of China’s top streaming sites with over 5 million paid subscribers. It charges an initial monthly fee of 19.8 yuan (US$ 3.12).
“Subscription revenue will become a major revenue source for iQiyi,” said Wang Xianghua, its senior vice president.
Services like these in China previously relied on advertising-based revenue. But with the advent of online and mobile payment services like Alipay and WeChat Wallet, more users are willing to pay for content, and the sites are spending aggressively to snap up hit titles or create new shows.
Alipay is a Paypal-like service offered by Chinese e-commerce giant Alibaba. WeChat Wallet is a payment service built into China’s most popular mobile messaging app WeChat, which is operated by the country’s social and gaming giant Tencent.
Rivals to iQiyi like LeTV are also stepping up their game and trying to broaden their reach.
LeTV, one of China’s largest entertainment portals, said it is splashing out up to HK$1 million (US$130,000) per episode on locally produced television dramas to woo Hong Kong audiences.
iQiyi did not disclose its budget as it is not a listed company, but its parent Baidu is known to have spent about 1.9 billion yuan (US$300 million) on content in 2014, up 125 per cent from 2013.
Baidi said in its annual report for 2014 that video content for iQiyi accounted for much of the increase.
Like many streaming services in China, iQiyi has become a production powerhouse and elbowed into territory formerly held by traditional TV networks.
Its talk show U Can U Bibi is an agenda-setting social phenomenon in China. Like the company’s Notes of Tomb Raiders, the series adapted from popular culture enjoys enormous popularity in the country.
iQiyi’s spending also extends internationally. It recently signed agreements with Hollywood studio Paramount in July and Lionsgate this month for the broadcasting rights of their movies online.