iQiyi stockpiling premium Hollywood content
Since before it split from Baidu (BIDU) and went public in 2018, iQiyi (IQ) has been stockpiling premium Hollywood films to help it stand out in China’s crowded video streaming market. iQiyi continues to show confidence in Hollywood production to strengthen its competitive edge. The company has secured exclusive broadcast rights for George Clooney’s Catch-22 miniseries from Viacom’s (VIAB) Paramount Pictures. iQiyi will air Catch-22 in China after it premieres on Hulu.
iQiyi last year secured exclusive rights to FilmNation’s content for a period of three years. The company also has exclusive content deals with leading Hollywood studios such as Fox (FOX) and Lions Gate Entertainment (LGF).
iQiyi and Alibaba bet on top quality content to stand out
As more Chinese consumers come online, the uptake of digital video services is on the rise, and for providers like iQiyi, competition is also tight. iQiyi is waging a tough war with some of China’s deep-pocketed Internet companies such as Alibaba (BABA) for revenues in China’s digital video market. Alibaba, which runs a YouTube-like video service called Youku, last year bought more shares in Alibaba Pictures to become a majority shareholder in the Hong-Kong-listed film production company. Alibaba took control of Alibaba Pictures as part of its efforts to drive growth in its digital media and entertainment division.
Alibaba’s digital media revenue jumped 20% YoY to $944 million in the December quarter. iQiyi generated $1.0 billion in revenue in the December quarter, representing an increase of 55% YoY. It closed the quarter with 87.4 million subscribers.