China's streaming leader Danny Vena (iQiyi): Investors willing to take on additional risk for the potential of life-changing returns don't need to resort to currency speculation, but can instead invest in a recently public, well-backed business involved in a paradigm shift in consumer behavior. Knowing what they know now, few investors would have passed on the chance to invest in Netflix when streaming video was first taking hold.
While more than half of consumers in the U.S. pay for a streaming service, that number is still far lower in China, currently at only about 13%. In previous years, Chinese consumers were content to use ad-supported services and piracy to satisfy their entertainment needs, but the tide is turning. One company that is positioned to capitalize on this growing trend is iQiyi (pronounced i-chee-yee), which is often referred to as "The Netflix of China," and one of the largest providers of streaming video in the Middle Kingdom.
The company recently completed its IPO in a spinoff from Chinese search giant Baidu, which is still the majority shareholder. Having one of China's largest companies as a supporter and benefactor is a huge advantage for both the company and its shareholders. As an example, Baidu provides artificial intelligence that helps iQiyi hone in on the most desirable programming for its customers.
There are plenty of other reasons to like iQiyi going forward. The company has more than 50 million paying subscribers and many more who still use the ad-supported option, giving the company a fertile field for growth. iQiyi recently partnered with JD.com to allow consumers to sign up for a premium membership, while enjoying the benefits of both for a year, a move that encouraged over a million new members in the first week alone. iQiyi was also recently selected by Forbes as one of the 50 most innovative companies in China. |
