Tencent Video battles iQiyi in China’s streaming wars

LAUNCHED IN 2010, iQiyi has grown used to the foreign press calling it “the Netflix of China”. Not the worst nickname, given the videostreaming pioneer’s success. But Gong Yu, iQiyi’s founder and boss, insists that his firm is more accurately described as “Netflix plus”. A bold claim for a loss-making business worth one-fifteenth as much as America’s (cash-generating) entertainment powerhouse with a market value of $214bn. Still, Mr Gong has a point.

Like Netflix, iQiyi offers customers a deep catalogue of licensed and original content. Unlike Netflix, which relies almost entirely on subscription fees, iQiyi has multiple revenue streams. “Membership fees”, which start from 19.8 yuan ($2.87) a month, accounted for just over half of iQiyi’s 7.4bn yuan in revenues in the second quarter. The rest came mainly from an online store (which sells “entertainment-related merchandise”), a nascent mobile-gaming arm, an e-book business and advertisements; iQiyi operates a “freemium” model which allows stingier users to stream some content free of charge provided they agree to watch ads.

Conveniently for iQiyi, which does little business outside its home market, Netflix is blocked in China, under laws that ban a lot of foreign content. But that is not to say that China is free from the streaming wars of the sort that pits Netflix...

via Business Feeds

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