iQIYI
iQIYI, Inc. (NASDAQ: IQ) is a Beijing-based provider of online entertainment video services in China, specializing in subscription video-on-demand platforms that deliver licensed and original content such as TV series, movies, variety shows, and animations.[1] Founded in April 2010 as a Baidu subsidiary under the leadership of CEO Yu Gong, the company has expanded into content production, live broadcasting, and international distribution while generating revenue primarily from memberships, advertising, and IP licensing.[2][3] Baidu maintains a controlling stake of approximately 45% in iQIYI, influencing its strategic direction amid ongoing efforts to achieve profitability in a competitive market dominated by domestic rivals like Tencent Video and Youku.[4] iQIYI has garnered recognition for its original programming, securing multiple awards including thirteen honors at the 2023 Shanghai TV Festival for series like A Lifelong Journey, which won Best TV Series, and contributing to high-profile content that drives subscriber growth exceeding 100 million VIP members.[5] The platform's emphasis on premium dramas and micro-short formats has propelled hits with popularity indices over 10,000, such as Coroner's Diary, establishing it as a key player in China's digital entertainment ecosystem.[6] Despite these successes, iQIYI has faced financial pressures, including substantial losses and workforce reductions following heavy content investments, alongside regulatory scrutiny over data practices and content controversies like halted idol competitions amid fan misconduct allegations and recent plagiarism claims in adaptations.[7][8][9] In 2024, U.S. courts dismissed securities class actions accusing the company of inflating user metrics, affirming no proven misconduct, while iQIYI pursues secondary listings in Hong Kong to bolster capital access.[10][11]History
Founding and Early Development (2009–2015)
iQIYI was founded by Yu Gong, with initial financial and operational support from Baidu Inc., China's leading search engine company, and Providence Equity Partners, a U.S.-based private equity firm. The platform launched as Qiyi.com in April 2010, marking it as the first online video service in China dedicated exclusively to professionally produced content rather than user-generated videos. This focus differentiated it from competitors reliant on amateur uploads, aiming to build a premium viewing experience amid rapid growth in China's internet user base, which exceeded 400 million by 2010.[12][13][14] In November 2011, Qiyi rebranded to iQIYI, incorporating the "i" prefix to evoke innovation and international appeal, while continuing to expand its library of licensed domestic and foreign titles. Baidu deepened its commitment in November 2012 by acquiring Providence's stake for approximately $380 million, elevating its ownership to 71.6% and providing iQIYI with greater resources for content investments amid intensifying competition from platforms like Youku and Tudou. This transaction solidified Baidu's control, enabling synergies such as integrated search-video recommendations to drive user traffic.[13][14][15] From 2013 to 2015, iQIYI accelerated content diversification, securing exclusive streaming rights for high-profile entertainment programs from mainland China, Taiwan, and South Korea, which boosted monthly active users toward 100 million by mid-decade. The company ventured into original productions, exemplified by the June 2015 release of Notes of an Ancient Relic Raider, a self-produced series tailored for online audiences and bypassing traditional TV broadcasts. In late 2014, iQIYI announced plans to more than double its original content output in 2015, targeting at least 30 new titles to capture premium subscribers amid regulatory pressures on unlicensed content and piracy. These efforts positioned iQIYI as one of China's top video platforms by 2015, recognized for rapid growth in a market where online video consumption surged due to mobile penetration exceeding 500 million smartphone users.[16][17]Growth and Public Listing (2016–2018)
During 2016 and 2017, iQIYI experienced substantial expansion in its user base and revenue streams, driven primarily by aggressive investments in original content production and membership services. Total revenues doubled from RMB 11.24 billion in 2016 to RMB 17.38 billion in 2017, reflecting a 54.6% year-over-year increase, with membership services revenue surging 73.7% to capitalize on premium content demand.[18] [19] The number of subscribing members more than doubled from 30.2 million at year-end 2016 to 50.8 million at year-end 2017, while average mobile monthly active users in the fourth quarter grew modestly from 405.4 million to 421.3 million.[18] These gains were fueled by a strategy emphasizing high-quality dramas, variety shows, and licensed international titles, positioning iQIYI as a leader in China's competitive online video market amid rising consumer preference for ad-free, on-demand viewing.[18] In 2018, growth accelerated further, with total revenues reaching RMB 25 billion, a 52% increase from 2017, supported by expanded content libraries and enhanced platform features like personalized recommendations.[20] Subscribing members climbed to 87.4 million by year-end, including a net addition of 36.6 million during the year, with 98.5% being paying users, underscoring the effectiveness of tiered membership models and exclusive originals in monetization.[20] [21] Despite these operational advances, the company reported widening net losses due to heavy content amortization and production costs, totaling RMB 7.6 billion for the year.[22] This period culminated in iQIYI's initial public offering on March 29, 2018, when it listed on the Nasdaq Global Market under the ticker symbol "IQ," pricing 125 million American depositary shares at $18 each and raising approximately $2.25 billion before underwriting discounts.[23] [24] The IPO, Baidu's largest spin-off to date, provided capital for content enhancement and technology upgrades, though shares debuted at $18.20 but closed 14% lower at $15.55 amid market volatility and concerns over profitability.[25] Proceeds were earmarked primarily for content acquisition (about 50%) and operational expansion, marking a strategic shift toward financial independence from parent Baidu while affirming iQIYI's scale in the sector.[26]Maturity and Strategic Shifts (2019–Present)
Following its 2018 NASDAQ initial public offering, iQIYI entered a phase of operational maturity characterized by efforts to achieve profitability amid intensifying competition from platforms like Tencent Video and Youku, and sustained high content acquisition costs that had previously driven annual losses exceeding RMB10 billion in 2019 and 2020.[27] By 2023, the company reported its first full-year net profit of $271 million, attributing the turnaround to rigorous cost controls, including reductions in non-core expenditures and optimized content spending, alongside membership growth to over 100 million subscribers.[28] This shift marked a departure from aggressive expansion toward sustainable financial discipline, with management emphasizing meticulous execution over bold risks to stabilize cash flows and reduce reliance on parent company Baidu for funding.[28] A core strategic pivot involved adapting to fragmented viewer attention by adopting a "Long + Short" content model, blending traditional long-form series with micro-dramas—short episodes under 10 minutes designed for mobile consumption.[29] By Q1 2025, iQIYI's micro-drama library surpassed 15,000 titles, yielding a 300% year-over-year increase in daily viewing time and 110% growth in unique daily viewers, prompting a further emphasis on original premium micro-dramas to enhance quality and monetization over licensed imports.[30] In Q2 2025 earnings, executives highlighted this evolution, noting a strategic refocus on consistent production of high-engagement short-form content to counter declining long-form ad revenues, which contributed to an 11% year-over-year drop in total revenues to RMB6.63 billion.[31] [32] To diversify beyond digital streaming, iQIYI expanded into offline experiences and IP monetization, launching iQIYI Land theme parks leveraging smart technologies for immersive content adaptations and developing consumer products from hit shows, tapping into China's IP derivatives market projected at RMB202.5 billion in 2025.[33] [34] Internationally, the company pursued geographic diversification, establishing a MENA branch in Dubai in May 2025 to localize content and serve regional audiences, while pursuing a $200-300 million Hong Kong secondary listing to access capital amid U.S. regulatory uncertainties and delisting risks.[35] [36] At the iJOY Conference in September 2025, iQIYI unveiled over 400 new titles for late 2025 and 2026, integrating AI-powered storytelling with expanded ecosystems across dramas, films, animations, and documentaries to broaden appeal and revenue streams.[37]Ownership and Governance
Major Shareholders and Ownership Structure
iQIYI, Inc. operates under a dual-class share structure, consisting of Class A ordinary shares with one vote per share and Class B ordinary shares with ten votes per share, which concentrates voting control with holders of Class B shares.[38][39] Baidu, Inc., the dominant Class B shareholder, maintains effective control over corporate decisions, including board composition and strategic direction, even as its economic ownership represents about 45% of outstanding shares as of mid-2025 data.[38][4][40] Public companies collectively hold the largest bloc at approximately 45%, led by Baidu, followed by smaller stakes from entities like Xiaomi Corporation at around 5%.[41] Institutional investors own roughly 28-30% of shares, reflecting moderate but diversified external influence, while insiders and retail holders account for the remainder.[40] The following table summarizes key shareholders based on 2025 ownership disclosures:| Shareholder | Ownership Percentage | Shares Held |
|---|---|---|
| Baidu, Inc. | 45.2% | 435,706,134 |
| Best Ventures Limited | 4.79% | 46,123,326 |
| Krane Funds Advisors, LLC | 2.26% | 21,740,065 |
Leadership and Key Executives
Yu Gong serves as the founder, chief executive officer, and director of iQIYI, Inc., a position he has held since the company's inception in 2010, where he oversees overall strategy and business operations.[44] Prior to establishing iQIYI, Gong held senior roles at Baidu, Inc., including leading its video search and mobile search initiatives, which informed the platform's early focus on online video services.[44] Haijian He was appointed chairman of the board effective August 1, 2025, following the resignation of Junjie He from that role.[44] [45] He, who also serves as Baidu's chief financial officer, brings expertise in financial strategy and operations from his tenure at Baidu since 2016.[46] Other key executives include Jun Wang, chief financial officer since at least 2020, responsible for financial planning, reporting, and investor relations.[47] Youqiao Duan serves as senior vice president, contributing to operational leadership.[48] The board also features directors such as Dou Shen, Fei Qi, and Zhanbing Xu, with Xu joining effective August 1, 2025, to support compensation and governance matters.[44] [45] These appointments reflect iQIYI's alignment with Baidu's oversight amid evolving market dynamics in China's streaming sector.[49]Business Model
Revenue Streams and Monetization
iQIYI primarily derives its revenue from membership services and online advertising, supplemented by a range of other monetization avenues such as content licensing and distribution. Membership services, which provide subscribers with ad-free access to premium and exclusive content, accounted for approximately 61% of total revenue in 2024, generating RMB 17.76 billion (US$2.43 billion), a 13% decline from the prior year attributed to a reduced content slate.[50][51] Online advertising constitutes the second-largest stream, encompassing display ads, pre-roll and mid-roll video advertisements, and brand sponsorships targeted at the platform's free user base. This segment leverages iQIYI's extensive viewership to attract advertisers seeking reach among Chinese audiences, though it has faced headwinds from macroeconomic pressures and shifts in advertising budgets.[52][53] Additional revenue sources include content licensing deals, where iQIYI distributes its original productions internationally or to third-party platforms, and value-added services such as virtual gifts in live broadcasts or integrated e-commerce features tied to content. These diversified methods, pioneered in China's online video market, support a hybrid model balancing free ad-supported access with premium subscriptions to maximize user engagement and monetization efficiency.[52][2]Content Acquisition and Production Strategy
iQIYI pursues a hybrid content strategy that integrates licensing acquisitions with extensive original production to sustain its competitive edge in China's streaming market. The company licenses third-party content from domestic broadcasters, international studios, and platforms to supplement its library with diverse titles, including films and series, while controlling costs through selective partnerships. For example, in July 2022, iQIYI signed a licensing agreement with Douyin (TikTok's Chinese counterpart) to provide select content for editing and distribution on the short-video platform, highlighting its approach to monetizing existing IP across ecosystems.[54] This acquisition method allows rapid library expansion without full production risks, though it constitutes a smaller portion of premium offerings compared to originals.[55] Original production forms the core of iQIYI's strategy, with in-house studios responsible for the majority of high-value content, including drama series, variety shows, and films. These studios enable direct oversight of creative processes, genre specialization in audience-favored formats like urban romances and historical epics, and retention of intellectual property for downstream monetization.[1] iQIYI invests heavily in such productions, maintaining stable content spending with marginal increases focused on quality originals, as outlined in its Q1 2023 earnings guidance.[56] By 2025, this has evolved into a "long + short" framework, blending traditional long-form dramas with short-form micro-dramas to capture fragmented viewing habits and drive user engagement.[57] Technological integration enhances production efficiency, particularly through AI tools for script generation, editing, and personalization, which iQIYI reported achieving 125% growth in application during 2025 initiatives.[58] This AI-driven approach, combined with resource allocation prioritizing creator autonomy and audience data analytics, supports scalable output—such as over 15,000 micro-dramas announced for global push—while mitigating rising costs amid industry trends toward vertical content.[59] Overall, the strategy prioritizes IP differentiation over broad licensing volume, fostering loyalty among China's 100 million+ paid subscribers through exclusive, culturally resonant titles.[60]Technology and Platform Features
AI-Driven Innovations
iQIYI has integrated artificial intelligence across its platform to enhance user engagement, content personalization, and production efficiency. The company's AI-driven recommendation system employs proprietary algorithms that achieve 98.6% accuracy in matching content to user preferences, powering 72% of views on the platform as of 2024.[61] This system analyzes viewing history, search patterns, and behavioral data to curate tailored feeds, surpassing traditional methods by incorporating real-time feedback loops for dynamic adjustments.[62] A key user-facing innovation is the Taodou AI assistant, launched to facilitate video searches, personalized recommendations, and plot summaries, which has deepened viewer immersion by enabling interactive queries during playback.[63] Complementing this, the iJump feature— an AI-powered tool for skipping to pivotal scenes—garnered over 150 million interactions within 120 days of its 2025 rollout, reducing watch times for episodic content while maintaining narrative coherence through semantic analysis of dialogue and visuals.[64] Similarly, the "Skip Watch" capability, introduced in April 2025, uses AI to generate concise navigation summaries, allowing users to bypass filler segments based on predicted interest levels derived from aggregated user data.[65] In content creation, iQIYI leverages generative AI for virtual production and visual effects, as evidenced by its 2025–2026 lineup collaborations emphasizing AI-enhanced post-production to cut costs and accelerate timelines.[66] The platform's OVA AI chatbot, featuring 1,000 virtual characters from popular IPs, has driven 1 million interactions since April 2025 by simulating real-time discussions and fan engagements.[67] Additionally, AI automates subtitle translation with near-full adoption in select markets like Malaysia by 2025, improving accessibility without manual intervention.[68] These advancements stem from iQIYI's Innovation Lab, established to centralize AI R&D and integrate tools across the content lifecycle, from scripting aids to distribution optimization.[69]User Experience and Core Features
iQIYI's platform emphasizes a user-friendly interface characterized by its simplicity and cleanliness, facilitating easy navigation for content discovery and consumption. The app supports multilingual interfaces, subtitles, and search functionalities in users' preferred languages, including up to 12 languages for UI and subtitles across its international version.[70][71][72] Core playback options include adjustable speeds, high-definition streaming up to 4K resolution, and offline download capabilities for selected titles, enabling viewing on multiple devices such as smartphones, tablets, smart TVs, and Roku channels.[73][74][75] Personalization forms a cornerstone of the user experience, leveraging AI algorithms to deliver tailored content recommendations that have reportedly boosted engagement by 37% over conventional systems. Features like the AI-powered assistant assist with video searches, plot summaries, and individualized suggestions, while the iJump tool allows vertical swipes to access AI-curated highlights, accumulating over 150 million interactions within 120 days of launch in 2025.[76][63][64] This extends to short-form content integration, where users swipe through personalized highlight reels, enhancing immersion without disrupting narrative flow.[65] Interactive elements further enrich engagement, including bullet comments (danmu) for real-time social overlay on videos, Heartbeat Mode for synchronized multi-sensory feedback, and Revolving Bullet Comments for dynamic community interaction.[75][77] Accessibility enhancements, such as the 'Extra Large Font' mode introduced in December 2024, adapt the interface for older users with one-click adjustments to text size and functionality.[78] Advanced offerings like VR content and interactive storytelling cater to niche preferences, supporting iQIYI's strategy of blending technology with entertainment to sustain daily active users exceeding 100 million.[75][79]Financial Performance
Historical Revenue and Profitability Trends
iQIYI's revenue grew rapidly following its 2018 initial public offering on NASDAQ, driven by membership subscriptions, advertising, and content licensing. Annual revenue increased from approximately $3.64 billion in 2018 to a peak of $4.79 billion in 2021, reflecting expansion in user base and premium content investments amid China's booming online video market.[80][81] Subsequent years saw stabilization and modest declines, with 2023 revenue at $4.50 billion and 2024 at $4.06 billion, attributed to intensified competition and economic pressures in China.[82] Profitability remained elusive for much of iQIYI's history due to substantial upfront costs for content acquisition, original productions, and technology infrastructure, resulting in persistent net losses through 2022. Losses narrowed progressively, from $1.37 billion in 2018 to $20 million in 2022, as cost controls and revenue diversification took effect. The company achieved its first annual net profit in 2023 at $271 million, though this dipped to $105 million in 2024 amid higher operating expenses.[83]| Year | Revenue (USD billions) | Net Income (USD millions) |
|---|---|---|
| 2018 | 3.64 | -1,368 |
| 2019 | 4.00 | -1,483 |
| 2020 | 4.30 | -1,080 |
| 2021 | 4.79 | -971 |
| 2022 | 4.50 | -20 |
| 2023 | 4.50 | 271 |
| 2024 | 4.06 | 105 |