A subsidiary of online search giant Baidu, iQIYI plans to list the shares on an overseas share market such as Hong Kong or the US, according to a report in the Wall Street Journal.
A share listing would help monetise and refinance the company’s operations in China’s immensely popular yet competitive video streaming market.
According to the government-backed China Netcasting Services Association (CNSA), by June 2016 the total number of China’s online video users reached 514 million, comprising 72.4% of the country’s online population. Online video apps are the most downloaded apps among China’s online entertainment services.
The State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) was notified of 4,430 online series and 4,672 online films between January and November 2016. Entertainment, culture and finance programmes account for the majority of these.
Mobile phones are the major devices for viewing online video in China, with 95% of those surveyed using their phones to watch online programming. Video is consumed on PCs by 54% of people, while 47% now watch online content via their smart TVs – double the 2015 figure.
The top five online video platforms in China are iQIYI, Youku, Tencent, Sohu and LeEco. Together, they invested in 5,162 original online series and variety shows, and purchased nearly 23,000 local and overseas programmes between October 2015 and September 2016. Licensed video content is still the mainstream category for market players, but the share of purchased content in total expenditure has been declining. By contrast, original content is growing rapidly, according to figures from the CNSA survey, released by niQIYI.
Films, domestic online series, variety shows and news are the most popular content carried on China’s online video platforms, accounting for around 70% of the time people spend on video streaming apps. CNSA’s survey found more than 80% of online viewers often watched films online during the past six months, with TV series being the next popular form of online content.
Until early 2016, the business model for video-on-demand (VOD) had been based on advertising, however, paid subscriptions are now on the rise, with over a third of online viewers in China paying for online content over the past six months. This equates to a rise in paid subscriptions of 18.5% on a year ago, said CNSA.