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Netflix-style service iQiyi ordered to pay a subscriber US$210 for levying more fees to watch a Chinese drama series

  • The Beijing Internet Court ruled against iQiyi in a lawsuit over the extra fees it charged a subscriber to watch advance episodes of the series Joy of Life
  • Rival service Tencent Video is involved in a separate lawsuit over that same ‘pay for advance airing’ business model

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The app of streaming video service provider iQiyi is seen displayed on a smartphone. Photo: Shutterstock
Iris Deng
A Beijing court on Tuesday ruled against Netflix-style service iQiyi for levying more fees on a subscriber to watch a popular Chinese drama series, setting back the streaming video provider’s efforts to generate more revenue from its premium content.
iQiyi, which is controlled by online search giant Baidu, was ordered by the Beijing Internet Court to pay plaintiff Wu Shengwei, a paying subscriber, 1,500 yuan (US$210) as compensation to cover his notary fees for the lawsuit, which was filed in December last year, according to the ruling. It also directed iQiyi to provide Wu with 15 days of free Golden VIP membership.

The lawsuit stems from a complaint that iQiyi violated its agreement with Wu, who is a Golden VIP member with access to advertisement-free content and advance series episodes. Wu said iQiyi charged him an extra 3 yuan for each advance episode of popular Chinese period drama series Joy of Life, which he still viewed with ads.

iQiyi’s unilateral introduction of a “pay for advance airing” fee damaged the interests of Wu as a subscriber, according to the court in a post on its official WeChat account.
Actor Zhang Ruoyun, seated foreground, plays the lead character in the popular Chinese drama series Joy of Life, which premiered on November 26, 2019. Photo: Handout
Actor Zhang Ruoyun, seated foreground, plays the lead character in the popular Chinese drama series Joy of Life, which premiered on November 26, 2019. Photo: Handout

During the live-streamed hearing, the court also ruled that advertisements shown at the start of a video did not violate Wu’s subscriber agreement, based on the clearly stated proviso that other forms of ads could still appear.

The court indicated, however, that iQiyi’s’ “pay for advance airing” model was not wrong, but it should not impair existing agreements. “It should be noted that the healthy development and operation of a business model should be based on the compliance of commercial terms, respect for user experience, and not violating relevant laws and regulations,” the court said.

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