iQIYI CEO Gong Yu shares insights on the future of Chinese film industry at the 11th Beijing International Film Festival
BEIJING, Oct. 8, 2021 /PRNewswire/ -- iQIYI, Inc. (NASDAQ:IQ) ("iQIYI" or 'the Company'), an innovative market-leading online entertainment service in China, announced today that Gong Yu, Founder and CEO of iQIYI, participated in the China Film Development Forum of the 11th Beijing International Film Festival (BJIFF). At the forum, Gong shared his insights into the changes that the Internet has brought to the production, distribution, and business models of films and TV in China, highlighting the value of the technology-driven industrialization.
According to Gong, the Premium Video on Demand (PVOD) and the Subscription Video on Demand (SVOD) models of online film distribution will spur two distinct film markets that cater specifically to each model. Meanwhile, technological innovation remains crucial to the industrialization of film and television because it reduces costs and enhances the audiovisual experience, thereby improving the investment returns and the probability of success.
SVOD and PVOD to form different markets
In the past year, iQIYI has distributed more than a dozen films through the PVOD model, providing users with flexibility while also furthering the development of the model itself. In mid-May of this year, iQIYI unveiled the Cloud Cinema, an online film transaction platform that leverages the Company's extensive partnerships within the film industry and helps create a viable 2C business model for content creators.
As the PVOD model matures, Gong believes that future online distribution of films will be split into two phases. The first phase will see the audience choosing to watch films under the PVOD model. In this phase, the business model of streaming platforms will be the same to that of the cinema's, with streamers and producers sharing the revenue based on actual online box office takings. In the second phase, which corresponds to the SVOD model, streaming platforms will either strike a flat fee or buy-out deal with producers at a fixed price or strike a so-called guarantee deal where producers receive a minimum guarantee payment with backend bonuses or a share of box office if the film's box office performance exceeded the base-case scenario. Gong believes that different films will emerge to cater to the two business models, and the variety will be a boon to the film industry. Regardless of the model, Gong reiterated the need for producers to fulfil the basic requirements of advancing technological innovation and ensuring copyright protection throughout the development process.
Technology-driven industrialization of film and television production is rewriting industry rules
At the iQIYI World Conference 2021 held in May, Gong repeatedly spoke about film industrialization, a key concept that will guide iQIYI as the Company continues to break through the boundaries embedded in the traditional film industry. "Thanks to 5G, AI, cloud computing, and other foundational capabilities, technological innovation will underpin the rewriting of industry rules," Gong said then.
At the BJIFF forum, Gong again emphasized the importance of film industrialization, citing three main benefits. First, it involves cutting-edge technologies such as AI and big data, which improve the stable improvement of investment returns by allowing for better management of resources. Second, the application of technological tools in the production process helps reduce risks, assure film quality, and raise the success rate of medium-budget and high-budget films. Third, as technologies such as virtual cinematography and AI-based production pick up, they can help enhance the video viewing experience and reduce time spent on production and associated costs while bringing value to the industry's future development.
When speaking of promoting the industrialization of film and television, Ya Ning, President of iQIYI Pictures, highlighted the Company's "Full Investment and Full Control" model. Under this model, Internet film companies such as iQIYI Pictures are producing theatrical films which can further promote the industrialization of films. For example, Break Through the Darkness, the first film presented by iQIYI this year, has achieved a box office of RMB 400 million and received widespread acclaim, which is the best proof that such a strategic direction is gaining market recognition.
In addition to offline film viewing, the 11th BJIFF also launched an online film screening that lasts from September 15 to October 8. As the official exclusive HD online video platform and exclusive partner of " Online BJIFF", iQIYI created an exclusive content library for the festival. The section features ten themes and over 100 films of various genres from China and abroad, allowing film fans to enjoy the world's best content anytime, anywhere.
About iQIYI, Inc.
iQIYI, Inc. is an innovative market-leading online entertainment service in China. Its corporate DNA combines creative talent with technology, fostering an environment for continuous innovation and the production of blockbuster content. iQIYI's platform features highly popular original content, as well as a comprehensive library of other professionally-produced content, partner-generated content and user-generated content. The Company distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. iQIYI attracts a massive user base with tremendous user engagement, and has developed a diversified monetization model including membership services, online advertising services, content distribution, live broadcasting, online games, IP licensing and online literature.
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