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. 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. Nasdaq-listed iQiyi said it reservers the right to appeal the court’s decision, according to the company’s statement posted on Weibo after the ruling was announced on Tuesday. A spokesman confirmed that statement on Wednesday. The ruling has come amid a public backlash on Chinese social media against the “pay for advance airing” model introduced late last year by iQiyi and Tencent Video, a streaming service run by internet giant Tencent Holdings, to ride on the broad popularity of Joy of Life , which premiered on the two platforms in November. Tencent Video was sued by one of its subscribers in a separate case over the same extra payment scheme, which is being heard by the Beijing Internet Court. China’s Netflix-style providers are facing a tough time amid sluggish growth in new users Those legal challenges have raised the stakes for China’s Netflix-style streaming video providers, which are increasingly promoting original premium content to attract more paying viewers in the world’s biggest internet and e-commerce market. Most of these domestic operators face continued losses because of lower ad revenue, despite higher demand during the community lockdowns triggered earlier this year by the coronavirus pandemic. iQiyi had 118.9 million total users at the end of March, with nearly all of them paying subscribers. Still, online ads decreased 27 per cent from the same period a year ago, which resulted in a wider net loss of 2.9 billion yuan in the first quarter. China’s streaming video market is projected to hit US$2.1 billion this year, a 14.6 per cent increase from 2019, according to data from Statista. Total number of users are expected to reach 417 million, up 10 per cent from a year ago.