iQIYI

iQIYI, Inc. was founded in 2010 by Gong Yu and is headquartered in Beijing.  Listed on Nasdaq under the ticker IQ, iQIYI is a leading provider of online entertainment video services in China, producing, aggregating, and distributing professionally produced content across multiple formats.  Baidu is the controlling shareholder and beneficially owns more than 50% of iQIYI’s total voting power.

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The platform’s content slate spans dramas, movies, variety shows, animation, and documentaries, supported by original productions and a large licensed library.  iQIYI positions itself as a tech-based entertainment company, using AI and data to power recommendation, distribution, and monetization.  In 2024, iQIYI generated RMB 29.23 billion in revenue, with membership services (RMB 17.76 billion) as the largest contributor, alongside advertising and content distribution.

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Management has focused on efficiency and disciplined content investment, aiming to sustain operating profitability while refreshing its content mix.  A current product focus is short-form “mini-dramas,” where iQIYI expanded its catalog to over ten thousand titles and improved ad placement tools to monetize rising viewership.  Internationally, iQIYI operates iQIYI International (iQ.com), available across 191 territories with multilingual UI and subtitles.

iQIYI monetizes premium video entertainment through a membership-led model complemented by advertising, content distribution, and IP-related side businesses. In 2024, membership services generated RMB 17.76 billion, making it the largest revenue line. Online advertising services delivered RMB 5.71 billion, while content distribution reached RMB 2.9 billion and other revenues were RMB 2.9 billion.

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Key activities
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1. Paid memberships as the core engine
   iQIYI sells access to premium long-form content and member features, with hit dramas and variety shows acting as the primary driver of subscriber adds and retention.
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2. Advertising across long-form and mini-drama inventory
   Advertising combines brand budgets with performance-based formats. In Q3 2025, online advertising services revenue was RMB 1.24 billion, with brand growth offset by weaker performance-based ads.  iQIYI is also building ad supply through mini-dramas, including upgrades to ad placement tools as viewing time shifts toward short-form formats.
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3. Content distribution and film monetization
   iQIYI earns from distributing and licensing content to third parties. In Q3 2025, content distribution revenue was RMB 644.5 million, with growth in theatrical movie distribution offset by softer drama-related distribution.
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4. IP expansion and “other” revenues
   “Other” monetization includes items such as online games, live broadcasting, IP licensing, and other value-added services.  Recent commentary also points to IP-based consumer products as a growing focus, including collectible merchandise tied to popular dramas.
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Market position in China

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iQIYI sits in China’s top tier of long-form streaming, competing most directly with Tencent Video and Youku, while also defending user time against short-video platforms that are pulling audiences toward mini-dramas.  The company pointed to a No. 1 position in total drama market share in Q4 2024 as a sign of content strength, but content spending remains the central profitability lever given the scale of production and licensing costs.

China is iQIYI’s main market and the core source of viewing time and revenue. The country’s streaming landscape is dominated by domestic platforms, with iQIYI competing in the top tier alongside Tencent Video and Alibaba’s Youku.  In fiscal 2024, iQIYI generated RMB 29.23 billion in revenue, including RMB 17.76 billion from memberships, reflecting a model where paid viewing sits at the center of monetization.

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Content performance remains the key local lever. iQIYI cited a No. 1 position in total drama market share in Q4 2024 and said it held the top position in total drama viewership market share in Q3 2025 based on Enlightent data.  To match rising short-form demand, iQIYI expanded its mini-drama portfolio to over 10,000 titles and upgraded its ad placement system to monetize that traffic.  Content approvals and platform rules shape release timing and distribution strategy across the market.

iQIYI’s growth plan centers on keeping paid membership resilient while building new monetization around short-form formats and IP. The baseline for investors is mixed. In 2024, total revenue fell to RMB 29.23 billion and membership revenue declined to RMB 17.76 billion, reflecting a lighter premium content slate.  Management has paired that with tighter cost control, reporting non-GAAP operating income of RMB 2.36 billion in 2024.

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Key growth drivers include:
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1. Premium long-form refresh with a “long + short” strategy
   iQIYI unveiled a 2025 to 2026 slate of 400+ titles, aiming to defend drama leadership while adapting formats and pacing.
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2. Mini-dramas as a second engine
   The mini-drama library surpassed 10,000 titles, and iQIYI has positioned iQIYI Lite around free, ad-supported mini-dramas to widen reach and inventory.
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3. IP monetization beyond subscriptions
   iQIYI is pushing deeper into IP derivatives and commerce. It launched a trial content-driven e-commerce feature designed to convert engagement into transactions, with a stated focus on scaling in 2026.
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4. Overseas expansion through iQ.com
   iQIYI International targets global Asian-content demand and is available across 191 territories with multi-language UI and subtitles.
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Challenges ahead:
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• Content cost volatility during peak release windows. In Q3 2025, iQIYI reported content cost of RMB 4.0 billion as it leaned into broader premium offerings.
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• Regulatory execution risk across both long-form and ultrashort content. China’s regulator eased some drama constraints in 2025, yet also tightened oversight of child-led ultrashort dramas in early 2026.
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• Balance sheet and funding needs, highlighted by a $300 million convertible bond offering in February 2025 aimed at refinancing and general purposes.