The online distribution model will evolve as technology drives the industrialization of film and television production
BEIJING, October 8, 2021 / PRNewswire / – iQIYI, Inc. (NASDAQ: IQ) (“iQIYI” or “the Company”), an innovative, industry-leading online entertainment service China, announced today that Gong Yu, founder and CEO of iQIYI, participated in the China Film Development Forum on 11e Beijing International Film Festival (BJIFF). At the forum, Gong shared his perspective on the changes the Internet has brought to the production, distribution and business models of films and television in China, emphasizing the value of technology-driven industrialization.
According to Gong, the premium video on demand (PVOD) and subscription video on demand (SVOD) models of online movie distribution will drive two distinct film markets that cater specifically to each model. Meanwhile, technological innovation remains crucial for the industrialization of film and television as it cuts costs and improves the audiovisual experience, thereby improving returns on investment and the likelihood of success.
SVOD and PVOD to form different markets
Over the past year, iQIYI has distributed over a dozen films through the PVOD model, providing users with flexibility while promoting the development of the model itself. In mid-May of this year, iQIYI unveiled Cloud Cinema, an online movie transaction platform that leverages the company’s many partnerships within the film industry and helps create a 2C business model. viable for content creators.
As the PVOD model matures, Gong believes that the future online distribution of the films will be split into two phases. The first phase will see the public choosing to watch films under the PVOD model. In this phase, the business model of streaming platforms will be the same as that of cinema, with streamers and producers sharing the revenue based on actual online box office revenue. In the second phase, which corresponds to the SVOD model, the streaming platforms will either enter into a package, or a buyout agreement with the producers at a fixed price, or a so-called guarantee agreement where the producers will receive a minimum guarantee payment with backend bonus or a share of the box office if the film’s box office performance exceeded the baseline. Gong believes that different films will emerge to meet the two business models, and variety will be a boon to the film industry. Regardless of the model, Gong reiterated the need for producers to fulfill the basic requirements to advance technological innovation and ensure copyright protection throughout the development process.
The industrialization of technology-driven film and television production is rewriting the rules of the industry
At the iQIYI 2021 Global Conference held in May, Gong spoke on several occasions about the industrialization of the film, a key concept that will guide iQIYI as the company continues to push beyond the limits entrenched in the traditional film industry. . “Through 5G, AI, cloud computing and other fundamental capabilities, technological innovation will underpin the rewriting of industry rules,” Gong said at the time.
At the BJIFF forum, Gong again stressed the importance of industrializing film, citing three main advantages. First, it involves cutting-edge technologies such as AI and big data, which enhance the stable improvement of ROIs by enabling better management of resources. Second, the application of technological tools in the production process can reduce risk, ensure the quality of films and increase the success rate of mid and high budget films. Third, as technologies such as virtual cinematography and AI-based production develop, they can help improve the video viewing experience and reduce production time and associated costs while bringing of value to the future development of the industry.
Speaking of promoting the industrialization of film and television, Ya Ning, chairman of iQIYI Pictures, highlighted the company’s model of “total investment and total control”. Under this model, Internet film companies such as iQIYI Pictures produce theatrical films that can further promote the industrialization of films. For example, Break the darkness, the first film presented by iQIYI this year, achieved a box office of 400 million RMB and has been widely acclaimed, which is the best proof that such a strategic direction is recognized by the market.
In addition to watching movies offline, the 11e BJIFF has also launched an online film screening that lasts from September 15 to October 8. As the exclusive official HD online video platform and exclusive partner of “Online BJIFF”, iQIYI has created a library of exclusive content for the festival. The section presents ten themes and more than 100 films from various genres of China and abroad, allowing moviegoers to enjoy the world’s best content anytime, anywhere.
About iQIYI, Inc.
iQIYI, Inc. is a leading online entertainment service in the market China. Its corporate DNA combines creative talent with technology, fostering an environment of continuous innovation and successful content production. IQIYI’s platform offers very popular original content, as well as a comprehensive library of other professionally produced content, partner-generated content and user-generated content. The company stands out in the online entertainment industry with its cutting-edge 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 diverse monetization model including membership services, online advertising services, content distribution, live streaming, online gaming , IP licenses and online literature.
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