Video site has big plans in Chinese online market

One of China's leading video websites, iQiyi.com, revealed its plans for 2015 programs and projects on Oct 31, as it aims to cash in on the booming Chinese online video market.

Its plans include making seven local films and one Hollywood film and producing 500 Internet dramas in 2015.

"IQiyi will produce 500 online dramas, or 15,000 hours, in 2015, compared with 300 dramas, or 6,800 hours, this year, up 67 percent," said Dong Ma, chief content officer of iQiyi.com, a Netflix-like site, which is Baidu's online video subsidiary.

"The average budget of Internet dramas (for each minute) has surpassed investment of traditional TV series," Ma said. He pointed to the Lost Tomb as an example, which is expected to cost 5 million yuan ($820,000) for each episode.

IQiyi aims to use the huge investment and latest technologies like 4-K and 3-D, to produce unique online dramas and programs to win audiences and market share, industry insiders said.

By licensing eye-opening overseas content and offering full coverage of domestic entertainment, Chinese video websites have drawn Chinese audiences, especially the well-educated young, away from television to mobile devices.

As the number of China's online video viewers passed 450 million, nearly half of the entries on Baidu's list of 50 most-watched TV series in the third quarter this year were not broadcast on television. IQiyi is visited through as many as 130 million mobile devices daily.

"The quantitative change has truly led to qualitative change. And we call this qualitative change independence," said iQiyi's CEO Gong Yu. To rely less on programs made by others, iQiyi is speeding up efforts to make its own.

IQiyi is also expected to transform from a content provider to a service provider.

"We plans to integrate video services with games and e-commerce," Gong said at the event.

"For example, we will develop games for dramas and entertainment programs, and viewers can also buy the items packaged in Internet dramas on our website."

According to data issued in August by ComScore, a global leader in digital-marketing intelligence, more than 280 million netizens in China streamed videos through video websites. Among these online video websites used by Chinese users, iQiyi ranked second — users accessed the site for a total of 569 million hours, compared to Youku Tudou's 698 million hours. The strong growth is expected to continue as more Chinese netizens look to watching videos online, and as 800 billion Internet users are expected in China by 2015, according to ComScore.

In the second quarter, Chinese online video sites raked in advertising income of 4.1 billion yuan, up 42.6 percent year-on-year. IQiyi was also No 2 in market share, with 19-percent behind Youku Tudou's 24 percent, said Beijing-based research firm Analysys International.