Chinese equivalent to Netflix? No, we want to be China’s online Disney, says iQiyi CEO

May 31, 2018
Industry News
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Meng Jing
meng.jing@scmp.com

The Nasdaq-listed company, which was spun off from online search giant Baidu, has sharpened its focus on artificial intelligence, big data analytics and other technologies to improve its efficiency in content production, sourcing and even censorship

While many investors compare iQiyi to US-based Netflix, the head of China’s largest online video-streaming service said it was built to be like The Walt Disney Company, the media and entertainment conglomerate behind Mickey Mouse and the Star Warsfranchise.

“Our business model is more like Disney’s than Netflix’s,” said Tim Gong Yu, iQiyi’s founder and chief executive, in a recent interview at the firm’s headquarters in Zhongguancun, a hi-tech zone in Beijing.

Describing Netflix’s subscription business model as one that is “simple and can be easily replicated in any country in the world”, Gong said following that same path will not help iQiyi achieve sustainable growth in future.

“Netflix has mainly English-language content, with Hollywood culture at its core,” Gong said. “For iQiyi, what we have is a big domestic market. But neither Chinese-language content nor Chinese culture has a huge audience overseas.”

Compared with the “horizontal” expansion of Netflix worldwide, iQiyi will focus on a “vertical” business model in the near-to-mid-term that will entail going deeper in the Chinese market, he said.

That strategy does not include building bricks-and-mortar theme parks like Disney. Instead, iQiyi plans to sharpen its focus on creating a Disney-like ecosystem of businesses.

“If a user likes to watch cartoons or TV dramas, he or she may also want to play a game or buy some merchandise based on a character [from our content],” said Gong, noting that Disney also derives income from various businesses, such as hotels and live-show ticket sales.

China’s online entertainment industry nearly trebled in the four years to 2016 to 157 billion yuan (US$24.5 billion). It is predicted to become a 690 billion yuan market by 2022, according to an iResearch report cited in a recent iQiyi regulatory filing. Continue Reading

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