(Original title: Foreign media: Baidu plans to let iQiyi raise $1 billion next year)

[TechWeb Report] December 22 news, according to foreign media reports, people familiar with the matter said that Baidu is planning to let its video site iQiyi conduct an initial public offering IPO, the transaction valuation of iQiyi up to 5 billion US dollars.

IQIYI

A person familiar with the matter said that iQiyi expects to raise about $1 billion through IPO, but the exact amount is still undecided. As Baidu negotiates with potential investors, the terms of the IPO transaction may change.

According to informed sources, Baidu is considering to let iQiyi go public in Hong Kong or the US next year. The IPO is expected to be valued at between $4 billion and $5 billion.

Insiders also said that Baidu plans to issue a batch of convertible bonds before the IPO, or use other similar methods to raise funds from investors, but the scale and timing of financing is still unknown.

An Aiqiyi spokesman declined to comment on the foreign media report.

Aiqiyi CEO Gong Yu: The network audiovisual industry is not far from full profitability

As the deputy director of the Central Propaganda Department, the director of the State Administration of Press, Publication, Radio, Film and Television, and the party secretary, the director of the National Copyright Administration, Nie Chenxi said, “The network audio-visual industry faces a rare opportunity for development.” The network audio-visual industry is rising in the fourth China. At the network audio-visual conference, we not only heard the good news of the profitability of the network audio-visual industry, but also got the latest situation of the deep integration of the network.

On December 8th, at the 4th China Network Audiovisual Conference, the founder and CEO of Aiqiyi, Gong Yuru, arrived. As an industry leader who has participated in several consecutive sessions, Gong Yu said with emotion: "The network audiovisual industry has developed for ten years, and now it can finally say that it has some mature feelings."

Where is the maturity? Gong Yu said that the first is that the market concentration of comprehensive audio-visual websites has increased, and the second is the rise of original content.

Although the online audiovisual industry had originality ten years ago, Gong Yu believes that a truly high-quality, large-scale original, just started a year or two ago. Excellent online original content, while bringing traffic and membership revenue to the video site, also produced an accessory product - a new generation of masters trained.

Then, "When will the Internet audio-visual industry talk about the day of profit?" This is a question that every film and television reporter will ask Gong Yu every year. In 2014 and 2015, Gong Yujun told reporters: "This year is still not time to talk about profitability." And yesterday, Gong Yu finally said: "I have expectations for the profitability of iQiyi, but I can't announce it now. For the profit nodes of the industry, I think this industry is not far from full profit. My analysis is not based on good wishes or subjective judgments, but on rational analysis based on basic data such as cost and income."

Small companies still have opportunities

Gong Yu recalled the scene when he prepared for iQiyi more than six years ago.

“At the time, I studied domestic audio-visual websites. In the collections, I collected more than 100 audio-visual websites. I watched many days and nights day and night.” At that time, Gong Yu’s feelings about the audio-visual industry were the characteristics of various websites. It is not clear that the smallest website and the largest website are not very different.

The consequences of homogenization can be imagined. Today, six years later, the audio-visual industry has experienced a major reshuffle, and the market concentration of comprehensive audio-visual websites has increased significantly. "This is a sign of market maturity, and everyone wants their company to come to the end." Gong Yu said.

Looking at the current mainstream comprehensive video sites: iQiyi, Tencent, Youku Tudou... behind the support of Internet capital like BAT. Does this mean that the Internet audiovisual industry is heading towards an oligopoly, and that small companies have no chance?

In an interview with reporters after the meeting, Gong Yu responded that the market concentration has increased for these comprehensive commercial websites. But the other end, that is, professional and vertical audio-visual websites, is actually more open, and even in each field, there can be two or more excellent websites. "For example, everyone knows the B station in the second year. This kind of website is very difficult for us to do on our comprehensive website."

The payment model is more fair

In Gong Yu's view, another sign of the maturity of the online audiovisual industry is the rise of original content. High-quality online original content not only brings considerable traffic to audio-visual websites, but also fosters a new generation of creative staff and makes the revenue model of audio-visual website companies richer and healthier.

Especially for the payment model, the number of paid members of iQiyi has grown rapidly in the past two years. In Gong Yu's view, the payment model is quite fair.

“The traditional business model of our audiovisual industry is the advertising model. Whether it is a TV station or a website, a small number of people decide whether to purchase or not, or a minority premium to determine the price, although there are various mechanisms to ensure its fairness and reasonableness. After all, it is not as good as all users to decide the good or bad of a work.” Gong Yu further elaborated, “From a long-term perspective, we believe that the payment model is more fair. A fair business model or trading model is more conducive to the acquisition of high-quality works. More returns, so this business model is also conducive to the improvement of content quality."

"Every day is sincere and fearful"

Even the original content and payment model have become the trend of the network audio-visual industry. When it comes to the shortcomings of this industry, Gong Yu admits that in fact, the quality of the original content of the network is not enough.

“We lack too many good stories, good models, and good ideas. Although in the past, the original works of the network have produced some new home staff, but the market demand is far from enough.” He analyzed: “In this case The pay and rewards of the actors or the creative staff are skyrocketing, which is determined by the relationship between the supply and demand of the market economy – the demand side is too strong and the supply side is too small.

“The new generation of creative personnel is the blank of the current market, and it is also an opportunity.” Gong Yu said that now the network audio-visual company has done a lot of things to translate the traditional film and television industry content onto the website. This simple translation is not a successful business model. . “The translation work must be done, but the breakthrough is innovation.”

In the exchanges with reporters, Gong Yu also admitted that his anxiety is precisely from innovation. Although iQiyi ranks in the forefront of the industry, he is "sincere and fearful" every day. "I think every day, is there any innovation today? Today is not, it is still okay. Tomorrow has not yet, this week has not yet, it is very anxious. Not only content innovation, but also technological innovation, business model innovation, etc. Etc. So whether it is able to continue to maintain innovation is my biggest concern."

Gong Yu also talked about the big movie on the Internet. He said that he is very optimistic about this form. "For the big movies on the Internet, we will definitely grasp the head market of the big production, but it will also give the living space for the works of the Focus Market. Literary works, niche commercial film types, can also have more space."

Such as Japan Fangsheng

"For the profit nodes of the industry, I think this industry is not far from full profit. My analysis is not based on good wishes or subjective judgments, but on rational analysis based on basic data such as cost and income." —Yi Qiyi founder and CEO Gong Yu

"In the past, our TV station's marketing of the program was very weak. Anyway, we produced our own broadcast, the former store and the factory. We have to do it again. Now the program you produce is a product, it is to be placed on the broadcast market. Selling, quality products, who buys you?" - He Dagong, deputy director of Changsha Radio and Television Station

Source: TechWeb Editor: Tan Zhanghui _NF1955