"China´s Disney" in the making - A conversation with Gong Yu, CEO of iQIYI

I met Mr. Gong Yu, the CEO of iQIYI, in a traditional Chinese teahouse in the north of Beijing. He is a polite and very friendly man who comes across as quite modest, despite his huge ambitions.

Biggest Chinese tech IPO since Alibaba

Not long after our conversation, IQIYI raised 2.25 billion USD on its first day on Nasdaq, which was at the time, in March 2018, the second biggest IPO of a Chinese tech company after Jack Ma´s Alibaba. That is a lot of money by any measure.

Still, while iQIYI has become a household name in China, not many people outside of China know the brand, even after the IPO. Most call it “China´s Netflix”, as iQIYI is also a video streaming portal. But this title, as big as it may sound, may still fall short of iQIYI´s real potential.

“We call iQIYI an online video website now, but in the future we will be an entertainment company, including media, film and drama productions”, says Gong Yu.

What that means is that iQIYI aspires to be not just “China´s Netflix”, but rather “China´s Disney”. 

The company´s transformation from a video streaming site to an entertainment conglomerate is already well under way. iQIYI has started to produce own content like the hit series “The Mystic Nine” about Chinese grave robbers in the 1940s. Already, 15 percent of all traffic on iQIYIs site goest to own content.

Deals with Hollywood

Gone are the days of “pirated movies” in China, since the Chinese government has started to clamp down on this. iQIYI is one of the winners of this new environment, as it has the money to license a lot of movies from Hollywood.

Gong Yu meets the chairman of Fox in Shanghai on one day, then pays Paramount ten million Chinese Yuan for the streaming rights for “Transformers 3” on another.

The rise of the Chinese movie industry, of which iQIYI aspires to be a major part, is something that investors worldwide are closely watching, and for good reason. Success at the “box office” of traditional cinemas is still important. But the likes and dislikes of Chinese consumers watching movies on their mobile phones via iQIYI and similar sites are increasingly important.

“Most film companies´ new media revenue is now larger than their box office revenue”, says Gong Yu.

Note: Part of my conversation with Mr. Gong Yu has been published as a CEO interview in Roland Berger´s magazine Think Act. You can read it here, by clicking on this link..

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Henrik Bork is the founder of Asia Waypoint and of the co-founder of Lychee.com in China. He believes that research is the basis for good storytelling. “China Notepad” is his blog about his work, the thought leaders he meets and the ideas that inspire him.