The decision highlights the political currents that underpin so much of the entertainment industry in Asia. And it brings to an end a chapter of messy corporate relations on the island.
“This is a painful decision,” the company said on its Facebook page on Sunday, announcing the termination of a six-year attempt to be a legal proxy for the Chinese streamer. “Because of the prolonged hostile attitude from the Taiwanese government, iQiyi has decided not to renew the contract with us when it expires at the end of the year.”
Taiwan has been self-governed for more than 70 years and is democratically-run. Its larger Communist neighbor claims that Taiwan is a rebellious Chinese province, with which it will be reunited, by force if necessary.
The high level of mistrust means disjointed relations in sensitive areas such as media, entertainment and news. And in September, the Taiwanese government banned iQiyi and other mainland Chinese streaming platforms.
Streamers such as iQiyi and Tencent’s WeTV had previously operated in Taiwan through partnerships with local agents. However, this kind of collaboration was deemed illegal on the grounds that internet broadcasting is not open to mainland investment under Taiwan’s “Act Governing Relations Between the People of the Taiwan Area and the Mainland Area.” Taiwan’s move to block mainland media operations was reportedly motivated by security concerns.
OTT Entertainment laid off dozens of employees when the ban first was implemented. In recent days, it has also reminded viewers that they can continue to watch iQiyi either by directly accessing its mainland Chinese platform or its app.
As growth has slowed in mainland China, iQiyi has made aggressive moves to court new subscribers overseas, especially in Southeast Asia. The company will report its third quarter financial results next week.