iQIYI, Inc.
iQIYI, Inc. provides online entertainment video services in the People's Republic of China. The company operates a platform that provides a collection of internet video content, such as professionally produced content licensed from professional content providers and self-produced content. It also engages in the production, aggregation, and distribution of online long-form videos, micro dramas, micro animations, micro variety shows, edited video clips, and video blogs; and provision of experience services, online mobile games, comics, and others. In addition, the company provides membership, online brand and performance-based advertising, and content distribution services. Further, it is involved in the talent agency and IP licensing activities. The company was formerly known as Qiyi.com, Inc. and changed its name to iQIYI, Inc. in November 2017. The company was incorporated in 2009 and is based in Beijing, the People's Republic of China. iQIYI, Inc. is a subsidiary of Baidu Holdings Limited.
What does it do?
iQIYI is often called the 'Netflix of China' — it's a streaming platform where hundreds of millions of people in China watch dramas, movies, variety shows, and short videos. Think of it like Netflix but built entirely for Chinese audiences, with homegrown hits like detective dramas and romance series that dominate Chinese pop culture. The company is owned in part by Baidu, China's version of Google. Unlike Netflix, iQIYI also lets smaller creators post short videos and blogs, so it's a mix of Netflix and YouTube.
iQIYI sits at the center of China's massive digital entertainment market, which is one of the largest in the world by user count — over a billion potential viewers. Investors are watching closely because China's consumer economy is trying to recover after years of COVID disruptions and regulatory crackdowns, and streaming platforms like iQIYI are a direct read on whether Chinese consumers are spending again. At a market cap of just $1 billion, this is a company that was once worth over $15 billion, so the question of whether it can stage a comeback is a live debate right now.
How does it make money?
iQIYI makes money in two main ways: subscriptions and advertising. Subscribers pay a monthly fee to access premium content without ads — similar to how you'd pay for Netflix. Advertising revenue comes from brands paying to appear in shows or on the platform. The company pulled in $27.3 billion RMB in revenue last year (roughly $3.7 billion USD), but revenue actually fell from $29.2 billion RMB the prior year, which is a red flag. Gross profit — what's left after paying for content and delivery — came in at essentially zero, meaning the company is barely covering its core costs before paying for anything else.
Why do investors care?
The bull story is simple: China has 1.4 billion people and streaming is still growing there. If iQIYI can cut costs, grow its subscriber base, and turn profitable, the stock could be worth much more than $1. The company has been actively producing its own original content — like studios do — which costs a lot upfront but can pay off if shows become hits. For this to work, iQIYI needs China's economy to improve so consumers keep paying subscriptions, advertisers return in force, and regulators don't throw more curveballs at the tech industry.
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