China’s streaming juggernauts seek to conquer Southeast Asia
BEIJING: Chinese video streaming giant iQiyi is looking to expand its service across 10 countries within South East Asia. The move would be the NASDAQ-listed company’s first venture beyond Greater China.
The move was disclosed on Wednesday by Yang Xianghua, president of membership & overseas business group, iQiyi, as part of a presentation at the APOS conference in Indonesia. He provided no timetable for execution of the plan.
The company’s biggest rival in China, Tencent Video is already moving in the same direction. Tencent gave a soft launch to a VoD service in Thailand in November last year. It formally launched its Thai service last month under the name WeTV, with a mix of Chinese, Thai, Korean and US content.
The Chinese video industry has evolved rapidly from a DVDiQiyi based and piracy dominated industry at the beginning of the decade into one of the most sophisticated online environments in the world. The three long form leaders – iQIYI, Tencent Video and Alibaba’s Youku — now have higher content spend than China’s traditional TV players. And they have achieved global scale, while operating in China without competition from Netflix and Amazon.
iQiyi operates a mixed business model with both advertising and subscription tiers. It reports 87 million paying subscribers, delivering $ 1.58 billion ( RMB10.6 billion) of revenue from membership services. Subscriptions account for roughly a third of iQiyi’s group revenue.
iQiyi plans to make its app available for download from virtual stores across the region, but it will not become wholly operational in each territory straight away. It is understood to be considering the opening of a Singapore office and is exploring relations with Astro in Malaysia.
Those two countries boast significant Chinese diaspora populations. Other priority countries are understood to include Thailand, which boasts a significantly digital savvy population and tumbling data costs, and youthful Vietnam.
iQiyi boasts a large volume of original Chineselanguage content, which it has commissioned or produced. Innovative technology and original content have helped convert free users into paying subscribers within China. The company now foresees further increases in production budgets to make original content that will win over Asian viewers.
In the medium term iQiyi original content could be supplemented with original local content, co-productions and acquired material.
To date iQiyi’s only operational experience outside mainland China has been in Taiwan. “We have learned a lot about different models and systems, and about different tastes in films, and Korean series,” said Yang. “We have other strengths such as music – our series ‘ The Rap of China’ is already popular in Malaysia – and the strength of Chinese stars and idols.”
“In Asean, Thailand and Indonesia are two strategic countries for Tencent and the company has a lot of consumer business in Thailand that it can leverage faster,” Li Kaichen, director of strategy development at Tencent and head of Tencent’s overseas video business, recently told Thai media.