China’s streaming wars may end with a duopolistic peace

巨头之战 A big-sum game-书迷号

IQiyi insists the setback was down to one-off factors, such as virus-induced disruption to film production, which temporarily emptied the content pipeline. Perhaps. But Tencent Video offers a richer selection of English-language content, including hit television series like “Chernobyl” and “Silicon Valley”. More important, the rivalry between Tencent Video and iQiyi is a proxy war between mighty Tencent and fading Baidu, a search firm that is iQiyi’s majority owner. Indeed, iQiyi seemed to concede as much in its latest annual report, writing that “competitors include well-capitalised companies that are capable of offering compensation packages more attractive to talents.”


Still, as Westerners who pay for a few video subscriptions can attest, streaming is not a zero-sum game. Gigi Zhou of BOCOM International, a broker, reckons the Chinese market will soon be big enough to sustain both iQiyi and Tencent Video, which also has yet to make money. Ms Zhou expects 400m Chinese to subscribe to video-streaming platforms by 2023, up from some 300m in 2019. So long as no new rival emerges, each firm could capture around 150m, helping them spread costs over more subscribers and so turn a profit.

不过,流媒体并非零和游戏,同时付费订阅多个视频服务的西方人可以证明这一点。券商交银国际(BOCOM International)的周喆估计,中国市场很快就会大到足以同时容下爱奇艺和同样尚未盈利的腾讯视频两者。周喆预计,到2023年将有四亿中国人订阅视频流媒体平台,高于2019年的三亿左右。只要没有新的竞争对手出现,每家公司都能吸引到约1.5亿订户,帮助它们把成本分摊给更多订户,从而实现盈利。

Before streaming peace can break out, iQiyi faces another fight. On August 13th it said it was under investigation by America’s Securities and Exchange Commission after a short-seller accused it of inflating sales data, a charge it denies. If found guilty, it may have to delist from New York’s Nasdaq exchange. The firm’s stable share price implies investors’ faith in battle-hardened Mr Gong is unshaken. ■