China’s Netflix iQiyi goes all-in on AI content in big overhaul

IQIYI expects artificial intelligence to create a big chunk of its films and shows virtually from scratch someday soon, a monumental industry shift that spurred the Netflix-style streaming service to begin the biggest corporate overhaul in its 16-year history.

The company plans to convert its video app and website into more of a social media destination that hosts a variety of AI-generated content, founder and CEO Gong Yu said at iQiyi’s annual content showcase in Beijing. As part of that transition, iQiyi officially debuted the Nadou Pro tool on Monday (Apr 20), an AI it said can handle almost every aspect of film-making from scriptwriting and storyboards to final video rendering.

IQiyi aims to become one of the entertainment industry’s biggest adopters of and advocates for AI, part of an internal effort to reverse a years-long sales slump triggered by the rise of short-video platforms such as ByteDance’s Douyin.

Gong promised to keep investing in professionally produced content, but said that kind of show will decrease as a proportion of iQiyi’s service over time. The company aims to release a commercially successful AI-generated film as soon as this summer, he added.

“It’s once in a decade,” Gong told the audience in the capital. “We have to take the tide as it comes.”

iQiyi, Alibaba Group Holding and Tencent Holdings together dominate video streaming in China, though audiences are more fragmented than in the US because of short video formats.

The Baidu company’s moves coincide with a debate raging in Hollywood, which is grappling with widespread layoffs and questions over how the technology will reshape the industry. From Netflix to Amazon.com, major studios are increasingly experimenting with AI technology to cut production costs and improve the quality of their work. Amazon has created an in-house team to deploy AI across its film and TV work.

The Chinese company’s Nadou software relies on AI models from competitors, including Alibaba, ByteDance and Kuaishou Technology. iQiyi is betting its deep ties to professional filmmakers will create a more seamless, industry-specific workflow.

The Nadou suite also features an IP library, allowing creators to tap the streamer’s catalogue of virtual assets and signed talent to generate new content. To showcase the tech, the Beijing-based company is flooding its platform with AI-generated titles, starting with a debut slate of 16 Nadou-produced films spanning sci-fi and anime. And to encourage more AI content creators, iQiyi plans to pay those producers an additional 20 per cent cut of advertising and membership fees, Gong said.

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Executives said onstage the company will roll out a standalone app letting users interact with characters from its shows in short clips – much like the once-viral Sora app that was killed by OpenAI.

IQiyi’s revenue is projected to slump 13 per cent in the first quarter. The company, which has US stock, filed for a Hong Kong listing last month, joining a wave of Chinese Internet peers seeking to tap capital closer to home.

To offset the squeeze, iQiyi is also pivoting towards high-growth niches and physical entertainment. Overseas membership revenue surged more than 30 per cent last year, though it remains a sliver of the company’s topline. It’s also monetising its library in the real world, having opened an indoor theme park in the Chinese city of Yangzhou. BLOOMBERG