Chinese video streaming company iQiyi hopes to have as many as half its subscribers in overseas markets in five years despite Sino-U.S. trade tensions and increased government censorship at home, founder and chief executive Gong Yu told Reuters in an interview.
The company, China’s answer to Netflix, has its sights set on Southeast Asia, where it is signing marketing deals with local partners. It also working to sell white-label versions of its streaming platform around the world, Gong said in a presentation at the Asia TV Forum in Singapore.
iQiyi, which is backed by search engine giant Baidu, has been locked in a fierce battle with Tencent’s video site and Alibaba-backed Youku Tudou in China. It offers Netflix-style subscriptions for TV shows and movies alongside ad-supported, user-generated video offerings that are more like YouTube.
In November, iQiyi said it had 105.8 million subscribers while Tencent Video said it had nearly 100 million paid subscribers at the end of June.
Gong said the market in China had stabilized after a period of intense competition for subscribers and premium content, laying the groundwork for price hikes of 10% to 20% in the second half of 2020. He also signaled that the prolonged cash-burning fight with its rivals could soon be over.
“The video market in the future is going to be an oligopoly market,” Gong told Reuters. “Currently the market share of iQiyi and Tencent video is about the same. Youku is half of that of iQiyi. So currently we already have a quite stable 2+1 status.”
“The stability, which started second half of last year, is helpful in reducing the competitiveness of the market...We, the three players, think the cost is too high. We burnt too much money.”
New content restrictions imposed by the government last year had raised costs for the company, Gong said, but he was hopeful that “the impact will gradually peter out.”
But the U.S.-China trade war remains an obstacle for the company, which is traded on the New York-based NASDAQ.
“70% of our investors are from the U.S. so a trade war between the U.S. and China will lower American investors’ confidence in Chinese companies, make it harder for us (to receive) investment. (It) makes it hard for us to do fundraising,” Gong said.