Chinese online video platform, iQIYI says that it will spend half of its budget on new shows intended to drive up the number of paid subscribers.
The company, a subsidiary of the search engine giant Baidu, said Thursday that in 2016 it will purchase or acquire 40 new shows.
China’s online streaming services have largely relied on advertising supported video-on-demand models. But in the last years, as payment systems have developed and as more consumers switch to mobile viewing, they have begun to add monthly subscriptions.
Earlier this year iQIYI claimed 500 million monthly users and some 5 million paying subscribers. It said that its hit TV series “Notes of Tomb Raiders” had been particularly important in converting casual users into subscribers.
More recently, iQIYI has struck content deals with Paramount Pictures and with Lionsgate. It now claims to have a library of 6,000 titles, including 2,500 Hollywood movies.
The announcement by iQIYI of its drive for still more new and original shows underlines the race for content being engaged by all of China’s video platforms. At times, other platforms have suggested that the chase is too expensive to sustain, only for them to renew the hunt months later. And nearly all are assumed by financial analysts to be in loss.
The new acquisitions drive may not automatically translate into a bonanza for Hollywood. Growing regulatory restrictions on imported content, put a premium on Chinese-produced shows – or content made as internationmal co-productions.
“We are confident that subscription revenue will become a major revenue source for iQIYI, and we will continue to invest to provide the best premium content and user experience for our paid subscribers,” said Yang Xianghua, iQIYI senior VP in a statement.
The company also announced that three Chinese stars, Yang Yang, Angelababy and Huang Bo will become image ambassadors for the iQIYI subscription business.