iQiyi, China’s Netflix, opens offline movie theater

22/05/2018

iQiyi, one of China’s leading online streaming companies, opened the doors of it’s first movie brick-and-mortar movie theaters in the country’s southern Guangdong Province.

 

 

The first of what iQiyi said will be a chain of “Yuke movie theaters” is comprised of small theaters ranging from two to ten seats, according to the Hollywood Reporter. Movie-goers can rent the spaces by the hour to watch content from the company that claims to have the largest arsenal of online content culled from around the world.

The idea is to combine the “convenience of on-demand service with the high-quality audio-visual environment of traditional cinemas,” the company said of the concept launched May 11.

“The development of on-demand movie theaters poses an exciting opportunity to increase the strength and overall scale of China’s film industry,”iQyiy’s senior vice president Yang Xianghua said in a statement.

He added that “iQIYI will take advantage of our strong brand awareness, massive user base, popular content and advanced technology to contribute to the growth of this booming market and extend our premium viewing experience to offline consumers.”

 

 

The idea is to combine the “convenience of on-demand service with the high-quality audio-visual environment of traditional cinemas,” the company said of the concept launched May 11.

 

 

Additional theaters are in the works for other first- and second-tier cities, the Beijing-based entertianment company said.

The Yuke concept smacks of the New Retail trend taking hold in China — to merge perks from both online and offline experiences for the benefit of the consumer. The concept, coined by Alibaba founder Jack Ma, has been applied to stores selling clothes, groceries and service, among other things.

The theater opening garnered attention in west, which has been increasingly moving away from brick-and-mortar operations. While American theater attendance plummeted to a 25-year low last year, China is seeing a boom in movie-going habits.

The U.S. low came coincided with a global record that brought in $40.6 billion, with growth in China off-setting declines in movie-going in the U.S. and Canada, Variety reported.

Last year, 970 films were produced in China, one of the world’s most prolific movie producers, but only 487 of them were played in theaters, iQiyi said. Yet as Chinese citizens’ income level rises, demand for in-theater viewing is growing.

 

 

“The development of on-demand movie theaters poses an exciting opportunity to increase the strength and overall scale of China’s film industry,”iQyiy’s senior vice president Yang Xianghua said.

 

 

Backed by China’s leading search engine, Baidu, iQiyi went public on Nasdaq in late March. A recent financial statement revealed a 57% revenue increase compared with the same period last year.

Despite the gains, the company still hasn’t produced a profit. According to TechNode, the increase can likely be attributed to gains in membership services revenues and online advertising.

Still, it is considered the forerunner in the competitive Chinese streaming-video market, with an estimated 61.3 million paid subscribers as of March. The Verge reported that QIYI’s active user base is quadruple that of Netflix, clocking in at 421.3 million in the fourth quarter of last year 2017 compared to the American company’s 117.58 million.

iQiyi maintains a significant content licensing deal with Netflix, as well as other U.S.-based partners, including Lionsgate, Warner Bros., Fox and NBC Universal.

 

 

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