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As the global film industry grapples with the new online distribution bureaucracy brought through COVID-19, iQIYI has China’s leader in the emerging premium video on demand (PVOD) sector.
The streamer presented an edition of its PVOD service last year, but did not begin to take off until 2020 due to coronavirus. With audiences confined to their homes, thirsting for new content and production corporations looking for tactics to make money on indefinitely suspended movie titles, a novelty in iQIYI, with its 606 million active users per month in February, has become a option. while the cinemas were closed.
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“In China, coronavirus has catalyzed the progression of new distribution models in which Internet platforms now distribute films directly themselves,” said Yang Xianghua, president of iQIYI’s foreign club and business at Variety. “The pandemic will have a long-term effect on many entertainment habits.”
PVOD, in words, came to stay.
The first notable Chinese film to abandon its theatrical projects and move on to a Chinese New Year comedy by Xu Zheng, only online, “Lost in Russia”, in January. Huanxi Media’s resolve to abandon cinemas and spread the name loose on Bytedance’s video platforms is so debatable that studios and operators came together to publish a rare joint complaint letter, saying the resolution would destroy China’s existing business model.
The moment the film skipped theatrical shipping due to COVID-19 the comedy starring Donnie Yen “Enter the Fat Dragon”, which chose to air with iQIYI from February 1. Since then, iQIYI has released 4 more: a boxing film “Knockout, “The Local Stage Name and Rehearsal” Spring Tide,” The Wedding Story “through Netflix, winner of an Oscar, and more recently, the chinese high-effect visual effects actor “Double World”, released on July 24.
Content streamed in the iQIYI PVOD has a “first publishing window” in which members and non-members will have to pay an additional payment to view the standalone and premium title. After this period, the movie becomes available to all paid subscribers to watch for free.
During this first window, iQIYI distributes profits with corporations with a minimum model of collateral and revenue sharing. Subsequently, iQIYI will pay the same previous license payment for a given time.
Although Yang claims that iQIYI boosted the profitability of “Trolls: World Tour,” a similar good fortune in China would possibly take time.
American audiences are more accustomed to paying for individual videos online and must pay higher costs because of higher purchasing power. Chinese viewers, on the other hand, are used to paying only a very low payment for memberships to streaming sites that provide access to full catalogs.
“Paying for a bachelor name is not yet a habit. Most users are simply not familiar with this kind of buying behavior,” Yang says. The coronavirus has “improved users’ acceptance of all kinds of online viewing” in China, he says, but “the accuracy with which users are willing to pay for content on those platforms remains unknown.”
iQIYI has “continuously experimented” with its PVOD prices, publication window duration and promotional methods, looking for which combinations paint most productive for what type of content.
In terms of marketing, it has tried less expensive pre-sales, discounts on price ticket lots, reasonably priced tickets on virtual occasions and live streams, and other online-only strategies. This type of “very online” strategy works well in China, where a large proportion of users watch videos on their phones.
“You can’t say we still have a very transparent and explained business model, but we’re looking for things and making adjustments,” Yang says. “China’s PVOD will grow more slowly than in the United States; will require more time and patience.”
iQIYI strives to frame its access to PVOD as an area of collaboration, a way to complement cinema and maximize the overall revenue of a film, rather than clashing directly with operators. The purpose is a “flexible” distribution style in which studios can set their own price ticket costs on the platform.
However, involving all partners will “require a communication procedure and paintings to patiently convince” people, Yang admits. But unprecedented cases require action.
“The pandemic disappears in the short term, like SARS in 2013, which ended,” he said. “We want to locate a way for the film industry as a total to continue painting, which requires us to paint in combination to find a solution.”
“Double World”, a $43 million budgeted adaptation of an online video game consisting of 80% special effects plans, is one of the most beloved films to debut through iQIYI’s PVOD service. It went on the platform and Netflix the same week as Chinese cinemas, yet they reopened, priced at RMB 24 ($3.47) in China for the general audience and part for iQIYI members. The average price of a Chinese film ticket is 30 RMB ($4.33).
“Of course, we first addressed this [decision to pass out on PVOD], because it was a film that was meant to be screened in theaters. It took some paint to convince the investors, the director and the actors. But in the end, everyone can understand,” said Wong Hoi Fung, ceo of film production company Film Co., Ltd.” We believe that the first online will definitely become a new trend in distribution, and we seek to be a first example. There will have to be someone to take the first step.”
This is especially true in China, he says, where the festival to bring a film to theaters is even more ferocious than in the United States, leaving much to be done for distribution channels of choice.
Starting next year, your company plans to create two or three films a particular year to distribute through iQIYI’s PVOD channel. Eye-catching advertising content tends to be more service-friendly than artistic or intellectual films, assumes and says, “Many will see it on a small screen, so you want to create content that can attract people’s attention more easily.”
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