Baidu’s Video Streaming Business iQIYI Files for US IPO

iQIYI.com, the on-demand video streaming service majority-owned by Baidu, has filed with the SEC to raise up to US$1.5 billion.

Source: SEC Filing

Revenue growth rate decreased from 113% in 2016 to 54% in 2017.

Advertising is still the biggest revenue source though an increasing portion is from premium subscription sales.

Subscribers were 10.7 million, 30.2 million and 50.8 million in 2015, 2016 and 2017, respectively. Subscriber revenues as a percentage of the total increased from 33% in 2016 to 38% in 2017.

Source: SEC Filing

Content costs accounted for 69.5%, 67% and 73% of its total revenues in 2015, 2016, and 2017, respectively. Content costs increased by 104% and 67% in 2016 and 2017, respectively.

Daily average user time spent was 170 million hours, 259 hours and 300 hours in 2015, 2016 and 2017, respectively.

The vast majority of the viewing is through mobile. Mobile daily active users were 126 million and mobile monthly active users 421 million as of the end of 2017.

Baidu acquired a controlling stake in iQIYI in 2012 and later merged it with video service PPS which was acquired by Baidu in 2013. Baidu currently holds 69.6% in iQIYI and Xiaomi, the leading smart device maker, owns 8.4% of it.

iQIYI’s major competitors include Youku-Tudou, acquired by Alibaba Group in late 2015, and Tencent Video. None of these on-demand video streaming services has turned a profit, said Robin Li, CEO of Baidu, on the company’s latest earnings call earlier this month.

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