In its quest to compete with Youku Tudou for the attention of China’s 618 million Internet users, Baidu’s IQiyi video website is tapping global movie festivals to satisfy Chinese viewers’ curiosity for foreign cinema.
In an initiative called Online Festival Screening, the Beijing-based site seeks to secure the right to stream directly from the festivals, a move enabling the company to shorten negotiation time with producers overseas and circumvent China’s quota system restricting foreign film imports because the system doesn’t apply to online distribution.
“It’s important that we have as many movies as possible but it’s difficult for us to buy movies overseas. We think the international festivals are a big opportunity,” said IQiyi founder and CEO Gong Yu.
IQiyi, which has yet to make a profit, is now streaming new releases from the Venice Film Festival, where it is also one of the main sponsors. The site has imported 30 titles including this year’s winner, Greek director Pantelis Voulgaris’ “Little England,” a romantic drama so popular in China that IQiyi is now trying to arrange a theatrical release.
IQiyi is catching up fast with Youku Tudou. The site is now tied with the New York-listed company, which has secured a $1. 22 billion investment led by Jack Ma’s Alibaba Group, in terms of monthly visitor number and viewing time, according to Internet consultant IResearch. Last year, IQiyi ranked 4th in the Chinese online video market before Baidu acquired another online video platform, PPS TV, for $370 million and sought to merge the two to create the largest video website in China.
IQiyi is now on the hunt for long-term partnerships with film festivals worldwide. The site has also worked with the Shanghai Film Festival in June and the 67th Cannes Film Festival. Its newly launched film production unit, IQiyi Motion Pictures, aims to co-produce seven domestic and one Hollywood film within the next year.
Within three years, IQiyi could hold an initial public offering with a valuation that would surpass Youku Tudou’s, Gong said in April. “We want to have the largest market share and revenue share in the industry,” he told Bloomberg. “By the time of the IPO, if our market share and revenue are both larger than Youku, we should have a bigger valuation than it does.”
