Inside Baidu’s Hollywood Expansion

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Baidu, known as Google of China, launched iQiyi in 2010 with US-based Providence Equity Partners. The company is based in Beijing and is currently the most used online video streaming site in China.

Since launching in 2010, iQiyi has accumulated the most paid SVOD subscribers in China, however, calculating an accurate subscriber base is challenging.

The three largest Internet conglomerates own the top online video services – Baidu (iQiyi), Alibaba (Youku Tudou), and Tencent (Tencent Video).

In mid-2015, iQiyi claimed 5 million subs, which jumped to 10 million by year-end. In 2016, the company reported 15 and then upped it to 20 million.

Dynamic Pricing Options

Similar to the early days of Hulu, iQiyi relies mostly on an ad-supported service. The SVOD premium service costs 30RMB per month, equivalent to $4.50. Compared to Netflix’s global average fee, it’s about half the price.

However, since less than 1% of free subscribers opted for the monthly premium SVOD service, iQiyi also offers various transactional payment options.

Multi-stream revenue models will dominate the emerging markets because they lack the legacy costs and business models that hinder dynamic pricing in developed countries.

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Inside access to a SVOD and VOD licensing agreement between iQiyi and a US-based motion picture studio that extends from 2013 through 2019. [more]

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Co-Production Opportunities

In December 2016, iQiyi and Sony announced a three-part Chinese language television co-production – an adaptation of Sony’s Crackle series Chosen.

This local co-production was another first, proving that Sony Pictures (owned by the Japanese conglomerate) is ahead of the curve in Asia.

While it’s somewhat common for Hollywood and Chinese companies to collaborate on promoting and co-producing English-language films, Sony’s coproduction supporting local-language content is unique.

iQiyi-Hollywood Library Expansion

Through licensing agreements with Warner Bros., Lionsgate, Fox, Paramount, Universal, and several European and Asian distributors, iQiyi has around 9,000 films in its library.

Warner Bros. (2017)
Most recently, iQiyi entered into a streaming output agreement with Warner Brothers. iQiyi will have access to 200 films in the Warner Brothers film library, including popular franchises – Lord of the Rings, Harry Potter, Rush Hour, and hits such as Gravity.

Lionsgate (2016)
iQiyi entered into a licensing agreement with Lionsgate in November 2016 for new and library films. iQiyi has exclusive online rights for Lionsgate theatrical films released in China.

Under the deal, the following pricing models are available – SVOD (Subscription), TVOD (Transaction) and AVOD (Advertising).

Fox (2016)
In late 2016, Fox signed an agreement with iQiyi that will grant exclusive digital rental and streaming rights in China to all Fox theatrical releases. The deal included hits such as The Martian and The Revenant.

Universal (2015)
In October 2015, iQiyi signed a multiyear licensing agreement with Universal for future films. Library films of past franchises were also available, e.g. Jurassic Park ahead of the release of Jurassic World.

Paramount (2015)
Earlier in July 2015, iQiyi contracted with Paramount to license up to 800 films. The deal covers popular film series’ – The Godfather, Transformers, Kung Fu Panda, Terminator, and Shrek.

Sony Pictures (2011)
Sony Pictures Television and iQiyi first entered into an SVOD & VOD licensing agreement in 2011. This licensing agreement was the first by a Hollywood studio and a Chinese online streaming website.