Streaming site iQiyi sets its sights on China's film industry

After its endeavor to bring a variety of shows and original programming to audiences won it millions of new viewers, iQiyi, one of China's leading streaming sites, is now aiming at something even more ambitious - establishing its own movie studio.

On July 17, the company announced that it was founding its very own film production company, iQiyi Film, which will work in cooperation with Baidu when it comes to marketing and promotions, while also working with big names in the movie industry such as Ye Ning, vice president of the Wanda Cultural Industry Group; Zhao Yifang, general manager of Huace Film & TV; director Wang Yuelun and actresses Yao Chen and Kara Wai.

Power of the Internet

"Film production companies are all about production, distribution and promotions. I have come up with one other responsibility besides these: Internet operations," said iQiyi CEO Gong Yu.

"Our Internet operations will involve derivatives, including online games. We hope that films will benefit greatly from online games," he continued.

One of the reasons behind this push towards "Internet operations" is surely related to the 83.1 billion yuan ($13.4 billion) in revenue earned by the online game industry in China last year - an amount four times greater than that earned by movie industry. Add to that all the film related merchandise like toys, stationery and clothing that is sold on the Internet, and it's clear to see that iQiyi most likely sees the combination of the Internet and film as a potential gold mine.

"The Internet can do more, using metadata to improve our efficiency, carrying out crowd funding and providing advanced ticket booking," said Gong.

Li Yansong, president of the newly founded film production company, said they fully intend to apply their Internet expertise to every phase of production.

"The metadata that Baidu and iQiyi possess gives us a unique advantage. By analyzing this metadata, we will be able to provide scientific data references for use during the script-creating and production phases," said Li.

Since last year, iQiyi has demonstrated that a focus on original content has become one of its major strategies.

However, according to a report from tech.qq.com on October 16, 2013, Gong revealed that while iQiyi has focused on investing in technology and content, most of the company's original content up to that time had been purchased from other production houses. At the time he stated that the company's next move would be to focus on self-produced original content, a direction that he feels is the future of streaming sites.

Looking back over the period of time from the end of last year to now, it seems that Gong has been true to his word, as iQiyi has successfully introduced several self-produced original series to its line up, while also gathering even more talented directors under its umbrella.

Meanwhile, iQiyi has continued cooperating with other companies to bring in original content. For instance, at the beginning of the year it worked with Huace Film & TV to bring the TV series iPartment as an online exclusive to the streaming site, where the show received more views than any other show on iQiyi - a total of 10 billion online views.

"Our film production company will be willing to work with any other film production company. We are genuinely willing to help content providers, content producers and distributors to win together," said Ma Dong, former CCTV anchor and current chief content officer for iQiyi.

Slicing up the pie

Not willing to stand on the sidelines, other Internet giants are also looking to get a piece of the film industry pie.

During the Shanghai International Film Festival in June, Tencent Video announced that it would participate in producing six films during 2014 including Zhongkui: Snow Girl And The Dark Crystal and Black and White: The Dawn of Justice.

Tencent's representative at the festival also emphasized that they should not be seen as invaders into the film industry, but that they intended to use their platform, methods and other advantages as an Internet company to benefit the Chinese film industry as a whole.

Other streaming sites are also testing the waters. Youku Tudou has had a hand in producing the films Firestorm, Overheard 3, Up in the Wind and the upcoming White Haired Witch, while Le Vision was one of the producers behind director Zhang Yimou's Coming Home.

From the looks of it, it won't be too long before streaming sites follow iQiyi in heading full tilt into the film industry and begin establishing their own film production companies.