iQIYI, “the largest internet video streaming service in China” and “an innovative market-leading online entertainment service” (according to their own official introduction), is an operation we’ve reported on often.
The company, which is nearly 70% owned by search giant Baidu, is often referred to by English-language media as “the Netflix of China”, and recently has been garnering attention for its original drama productions Tientsin Mystic and Burning Ice.
After listing on NASDAQ on March 29, iQIYI attracted further headlines when the two dramas picked up a number of awards at the New York Festivals World’s Best TV & Films Competition on April 11, a contest that included films and TV shows from over 40 countries. Tientsin Mystic won the Bronze World Medal for Direction, Silver World Medal for Special Visual Effects, and was nominated for Best Drama; Burning Ice won the Bronze World Medal for Crime Drama and was nominated for Original Music. Both dramas have been distributed on (the actual) Netflix since February.
But how does the Chinese entertainment giant — which boasted 60.1 million subscribers, over 98% of them paying, as of the end of February — feel about the constant Netflix comparisons? And after all the recent hype overseas, where do they go from here?
I talked to Leon Chen, iQIYI’s Vice President of Marketing, to find out more.
Leon Chen
The Era of “Super Internet Dramas”
In the past, the “internet drama” genre was viewed as being comprised of shows with “cheap scenes, low investment, and poor quality,” made by inexperienced crews and distributed on video streaming platforms. But since iQIYI began producing their own dramas, they’ve invested huge amounts of capital and resources into creating quality original content — causing a major shift in the landscape for online dramas.
In 2015, iQIYI’s original internet drama The Lost Tomb launched a new business model — membership services in tandem with online advertising — and a new age of “super internet drama” had arrived. With an investment of over 5 million RMB (almost $800,000 USD) in each episode, The Lost Tomb attracted millions of viewers thanks to its film-level quality.
It’s an approach that iQIYI has since continued. For Tientsin Mystic and Burning Ice, the platform invited veteran film professionals and top film production teams to work on the projects. This included figures such as Han Sanping, former chairman of the China Film Group Corporation, and Chen Kuo-fu, a famous Taiwanese film director, screenwriter and producer.
“Producing original drama and content is one of our most important strategies, and a real driving force,” says Chen in explaining the heavy investment. But the company has not only helped revolutionize what people in China are watching, but also how they do so.
“First of all, the weekly release and seasonal production model makes our shows different from the TV series Chinese people used to watch, which might have a total length of 60 or 80 episodes, and were released daily,” says Chen. “Secondly, we’re aware of the taste of young Chinese consumers, who are not like their parents or grandparents, but have grown to like dramas with strong plots and a fast pace.”
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iQIYI’s core viewership consists of people under the age of 29, with internet reality shows particularly popular among teenagers. It’s a rapidly shifting demographic to track, and iQIYI carries out regular audience research to ensure its programming remains relevant.
“When we select the themes of our original dramas, we adhere to two principles: creativity and consumer interest,” says Chen. “For the latter, we do research and a survey twice a year, because it’d be too late to begin production if we only knew the consumers’ interests from one year ago. For example, according to our research last December regarding potential themes for new dramas, the themes that audiences said they were most interested in were urban romance, detective stories, and campus youth.”
AI, Big Data Analytics and Other Core Technologies
Baidu, China’s main search engine and iQIYI’s parent company, has provided iQIYI with technology, infrastructure and financial support.
AI technology is not only applied to video content creation, purchasing, production, and tagging, but also integrated into the entire business process, including content distribution, monetization, and customer service capabilities, according to Chen.
Deep learning algorithms are used to help with market research as well as market prediction. According to an official report produced by the company, a 180-day forecast model of box office receipts for 100 films created by an iQIYI algorithm has achieved a statistically significant accuracy rate of above 80%.
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Big data analytics capabilities have built a user and content database to profile iQIYI users more precisely, and deliver accurate and personalized content recommendations.
“We also guarantee that all the data shown on the website is accurate, unlike some other platforms,” says Chen, in reference to some streaming sites’ apparently inflated viewing figures. “Since we have a specific anti-data-attack system, both the audience and content providers know the real numbers, and the third-party data provider iResearch can prove it.”
“We Are Netflix Plus”
So is iQIYI “China’s Netflix”, as English-language media reports so often like to claim?
“iQIYI and Netflix do have a similar model for paid online content and membership services,” Chen concedes. “However, advertising income makes up an even larger proportion of our revenue.”
In particular, iQIYI has numerous sponsored spin-offs from its programmes, as Chen explains:
If the viewers like our latest variety show Clash Bots, they can also go play our online phone game; if fans like their idols’ clothes in our show Idol Producer, they can purchase the same clothing immediately. We’re doing more than original dramas — we’re doing IP licensing, live broadcasting, online games, e-commerce, and more…
In addition, last year iQIYI began to promote “Dolphin Plan,” “Tiger Plan,” and “Swan Plan” — internal development programs that aim to dig out and cultivate new producers and actors.
“We’re building an Entertainment Ecosystem, within which we have developed a diversified monetization and commercialization model. Therefore, we consider ourselves to be ‘Netflix Plus.’”
Netflix and iQIYI are “mutual content providers,” Chen says, pointing out that the US-headquartered operation is one of several overseas partners. “We also collaborate with Hollywood film production companies and entertainment giants like Disney, Sony, Universal, and Warner, and distributors from Malaysia and Singapore.”
The Return of The Rap of China
Although the company is now listed on the NASDAQ, “for short-term planning, we will still focus on a Chinese audience, both domestically and overseas,” says Chen. But the company is not adverse to giving its programming an international flavor.
On April 13, iQIYI announced that its original show The Rap of China (中国新说唱)* was officially launching its first international contestant search, inviting aspiring rappers from all over the world to participate. The show is dedicated to promoting Chinese-language rap, and was the first reality show in China to adopt a “reality-drama” production style.
Although details are yet to be released about what direction Rap of China season 2 will take following the subsequent troubles of the first season’s co-champions, another representative from iQIYI stated firmly that “from the perspective of iQIYI, The Rap of China [中国新说唱] is a brand new, different show from last year’s Rap of China [中国有嘻哈], and the former should not be seen as the second season of the latter.”
In any case, iQIYI has proven adept at pivoting in response to vague “hip hop bans” in the past, and with their rich dataset and AI-enhanced market research model, we’re sure they’ll continue producing exactly what young China wants to watch for the foreseeable future.
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* Note: The English name for The Rap of China is the same as last year’s, 中国有嘻哈, but the Chinese name has changed to 中国新说唱, swapping the word for “hip hop” (xiha; 嘻哈) to the word for “rapping” (shuochang; 说唱; literally “speak singing”).
Cover image: iQIYI in Times Square
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