Chinese online video company iQIYI Tuesday revealed that it has over 5 million paid-for subscribers to its premium VoD system.
The company which largely operates on an advertising supported business model, said that SVoD numbers enjoyed have surged in the past two quarters. Year on year growth in SVoD subscribers is 765%, the company reported.
“The success of iQIYI’s paid subscription model demonstrates the strong demand of Chinese audience for online-video platforms with high-quality content. Users’ willingness to pay for content reflects the huge opportunity and potential for iQIYI and the online-video market in China,” said Gong Yu, iQIYI’s founder and CEO.
“With 5 million paid members, iQIYI is the industry leader in terms of paid subscribers. However, this is still a small portion of our over 500 million users, and we expect that the future conversion rate to paid members could be substantial,” said Yang Xianghua, senior vice president of iQIYI. He forecast that number could double in the next 12 months.
“Effective measures against piracy and the advent of better payment systems such as Alibaba’s Alipay and Tencent’s WeChat Pay, make it easier to use credit cards and to make mobile payments,” Yang told Variety.
“The generation of users born post 1990 also understands the value of content. They are cash rich, but time poor. They are willing to pay for the convenience of accessing quality without having to go through the complications of finding illegal content.”
Even after doubling in the past four years, the price point remains low. Users can get iQIYI’s premium service for RMB20 ($3.25) per month. Yang said that many users have signed up recently in order to watch its original content, especially the “Lost Tomb” show.