Renowned financial news source Bloomberg is reporting that Qiyi.com, the online video venture majority owned by China’s largest internet search engine, Baidu, is considering charging its users subscription fees.
Qiyi reached 150 million users in March after a year in operation and will next look to expand in the mobile video market, vice-president Yuan Bin told an internet conference in Beijingtoday. He reiterated the company’s desire to sell shares to the public, without specifying a market or timeframe.
“The future of the online video industry is to have two models: customer paid, and advertising paid by companies,” Yuan said. “We are now exploring the paid-by-customer model.”
Baidu’s CEO Robin Li is diversifying from the search-engine business after overcoming a challenge from Google, which lost market share in China after a censorship dispute with regulators last year. Li said in February that Qiyi may seek a listing, without giving a timeframe.
The number of Qiyi users paying for content is still “quite small,” Yuan said, without supplying details. The company is benefiting from its connection to Baidu, which controls about 80% of the search market in China and can help drive users to the Qiyi site, Yuan said.
Baidu owns 61% of Qiyi. For accounting purposes, it is deemed not to have control over Qiyi due to rights provided to a convertible redeemable preferred shareholder, the company said in its annual report in March.
Providence Equity Partners, an investor in Hulu, last year said it would provide $50m of funding to Baidu’s video website. Hulu offers video content from owners including NBC Universal, Fox and ABC.