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Tencent Video and Baidu’s iQiyi face backlash after hiking prices for trending TV show

Chinese video streaming platforms are trying different ways to pave the way to profitability.

Photo source: shutterstock.com

Two of the most popular Netflix-like platforms in China, Tencent Video and Baidu’s iQiyi, are in the middle of the storm after unveiling this Wednesday a premium VIP plan for its paying users, charging additional RMB 50 (USD 7) for access to the latest episodes of the trending Chinese TV series “Joy of Life.”

The two streaming services quickly encountered a backlash from netizens, who wrote on several social platforms that these companies are abusing copyrights and treating consumers unproperly. “I’m annoyed with Tencent. It wants to drain every cent out of its users. The VIP plan doesn’t guarantee anything,” wrote a netizen on China’s Quora-like site Zhihu, promptly collecting more than 25,000 “agrees.”

Joy of Life, also known as “Qing Yunian,” in Chinese, is a TV show based on an internet novel dabbling in martial arts and fantasy themes. Tencent Picture acquired the book’s film and TV adaptation rights in 2017, and premiered the TV show on November 26 on its platform Tencent Video on a freemium model, also granting the streaming right to iQiyi.

As Joy of Life suddenly became a hit, gathering 1.9 billion views on Tencent Video and nearly 500,000 “likes” on iQiyi, both platforms are trying to capitalize further on the series success. Users can watch the first 15 episodes of the series for free, while paying users have access to additional six episodes, and according to the recently announced premium VIP plans by both providers, the rest of the series will be exclusive to users paying the extra fee.

It is not the first time for Chinese video sites to launch such a dedicated premium plan for popular TV shows. Over this summer, a TV series called The Untamed, also showcased on Tencent Video, went viral. But just one week before the final episode, Tencent announced a VIP premium plan, which allowed its subscribers to unlock unreleased episodes in advance by paying RMB 50. Tencent’s move brought benefits to the company, as more than 2.5 million users subscribed immediately, generating RMB 75 million for the platform within 24 hours.

Chinese video streaming platforms are trying different ways to pave the way to profitability, since the growth of paying users has been slowing down.

In the third quarter of 2019, iQiyi reported total revenues of RMB 7.4 billion (USD 1 billion) with a widening net loss of RMB 3.7 billion (USD 516 million), and an increase of 31% year-on-year on its number of subscribers to 105.8 million. In comparison, the company reported an annual growth of 89% in its subscriber base in the same period in 2018.

Also, Tencent Video, with 100.2 million subscribing users as of September, is still burning money. According to a Sina Tech report from June, Tencent Video’s annual net loss could hit RMB 8 billion in 2019,  although Tencent didn’t reveal the financial situation of its video streaming arm in the firm’s quarterly report.

More than 300 million Chinese paid for video streaming services in 2018, contributing more than one-third of platforms’ overall revenues, according to a Xinhua report.