You will be redirected back to your article in seconds

Content Costs Double at Chinese Video Streaming Giant iQIYI

The cost of content for Chinese video streaming platform iQIYI more than doubled in 2016, parent company Baidu has revealed.

The figures highlight the growing commitment to the entertainment business on the part of one of China’s Internet giants, as well as the costly competitive landscape.

Presenting its annual financial report for 2016, NASDAQ-listed Baidu said that content costs had ballooned from $540 million (RMB3.75 billion) in 2015 to $1.13 billion (RMB7.86 billion) in 2016, an increase of 109% in local currency terms.

Baidu, which offers a range of services built around China’s most used search engine, reported a 6% increase in revenues to $10.1 billion (RMB70.5 billion). But beset by a host of problems, Badu saw net profits down by 65% to $1.67 billion (RMB11.6 billion.)

Baidu currently owns 80.5% of iQIYI and in 2016 turned down a bid to take the unit private. Institutional shareholders said that Baidu had invested heavily in the streaming sector and that the offer undervalued iQIYI.

The battle with Alibaba’s Youku Tudou and with Tencent Video for market share is proving a costly one. This week Baidu said that it needed to raise $1.53 billion for iQIYI through the issue of commercial debt that is convertible into iQIYI shares. At 2016 pace, that figure is equivalent to 16 months of spending on content.

“iQIYI has been a quality asset and an important part of our ecosystem. With continuous support Baidu will empower it with artificial intelligence facilities in the future,” said Baidu CEO Robin Li at the time of the refinancing. Earlier this month, rival Alibaba Pictures also warned of increased losses in 2016.

iQIYI is increasingly producing and financing its own content, a move that is intended to boost recurring subscriptions. But the company does not break down its spending on acquired and self-produced content.

Content spending slowed in the fourth quarter to RMB2.57 billion, an increase of 86% compared with the last three months of 2015.

More Digital

  • Facebook Logo

    #LogOutFacebook: NAACP Calls for Boycott, Civil Rights Groups Demand Board Changes

    The NAACP is calling on Facebook users to take part in a one-day boycott of the social network this Tuesday to pressure the company to do more against disinformation and racial discrimination. Separately, a coalition of about three dozen social justice groups called on Facebook to remove key executives from its board of directors. The [...]

  • Westworld Season 2 HBO

    Facebook Has Talked With HBO, Showtime and Other Networks but It's Unlikely to Proceed With Pay-TV Idea

    Is Facebook about to become cable TV provider? Don’t bet on it. The social giant has held informal discussions with cable networks including HBO and Showtime Networks about potentially offering subscriptions to their streaming services on Facebook, multiple sources tell Variety, confirming a Recode report last week that first reported the talks. However, Facebook currently [...]

  • Ed Sheeran Shape of You

    Ed Sheeran, Clean Bandit Top Shazam’s 2018 Year-End Lists

    Clean Bandit and Demi Lovato’s song “Solo” was the most-Shazamed song and Ed Sheeran’s “Perfect” was the longest running No. 1 track on the service’s global charts, the company revealed today in its year-end lists. Nicky Jam and J Balvin’s “X” was the No. 2 most-Shazamed song and Calvin Harris & Dua Lipa’s “One Kiss” [...]

  • Remote for Android TV-Based TiVo Device

    TiVo FCC Filing Suggests Android TV Device Coming in Time for CES

    A filing for a new TiVo remote control suggests that the company may be getting ready to show an Android TV-based set-top box at CES in Las Vegas next month. The device likely won’t be sold to end users, but instead ship to TV operators looking to combine TiVo’s DVR capabilities with Google’s TV platform. [...]

  • Telemundo to Launch English-Language Newscast With

    Telemundo to Launch First English-Language Newscast on YouTube (EXCLUSIVE)

    NBCUniversal’s Hispanic broadcaster Telemundo is developing its first English-language newscast in collaboration with YouTube in a bid to tap the burgeoning U.S. Hispanic youth demographic. Borne out of a YouTube grant aimed at awarding journalism projects that “elevate quality journalism, evolve business models to drive sustainable growth, and empower news organizations through technological innovation,” Telemundo News’ [...]

  • Wall Street Journal Site Hacked With

    Wall Street Journal Site Hacked With Pro-PewDiePie Message

    PewDiePie’s ongoing battle to keep his channel’s YouTube subscriber count No. 1 ahead of India’s T-Series took another bizarre twist: A branded-content section of the Wall Street Journal’s website was hacked with a fake message apologizing to PewDiePie and urging people to subscribe to his channel. A spokeswoman for Dow Jones & Co., publisher of the [...]

  • YouTube - Comcast Xfinity X1

    YouTube 4K Content Goes Live on Comcast's Xfinity X1 Set-Tops

    Comcast television subscribers can now enjoy YouTube in ultra-high definition: The Google-owned video service is now serving up 4K videos on Comcast’s Xfinity X1 set-top boxes, the cable company announced Monday. X1 owners who also happen to have a X1 voice remote can get access to a curated selection of 4K content by asking the [...]

More From Our Brands

Access exclusive content