(Yicai) Sept. 24 -- iQIYI is going "all in on AI" and building a decentralized ecosystem as part of two major strategic priorities aimed at lowering content costs, while boosting revenue quality and profitability, the details of which were laid out at the Chinese video-streaming giant’s iJOY Autumn Conference in Shanghai yesterday.

"Traditional film and television content is simply too expensive," said Gong Yu, iQIYI's founder and chief executive officer. "A single movie or TV series can cost tens of millions of Chinese yuan, equivalent to millions of US dollars, at the very least, and up to several hundred million yuan."

Artificial intelligence is already being adopted extensively across film and TV production, improving the viewing experience while shortening production cycles and reducing costs, he said. Citing the economic concept known as the Jevons paradox, Gong argued that if the cost of producing each minute of content falls by an order of magnitude, the number of creators could rise 10-fold and the number of works 100-fold, ultimately driving a sharp increase in consumption.

Based on this outlook, iQIYI is repositioning itself. Gong said the Beijing-based firm is moving away from a "centralized media" model, in which the platform takes the lead in acquiring, producing and marketing content, toward a "decentralized" ecosystem that connects creators directly with audiences.

Gong said he expects the long-form video industry as a whole to follow the same path. In his view, many capable creators no longer need extensive involvement from platforms and can directly upload long-form works. In the future, long-form video and film could increasingly adopt a social media model, similar to platforms such as Weibo, Douyin, which is the Chinese version of TikTok, and Xiaohongshu, also known as RedNote, he added.

To this end, iQIYI has built seven major creator support systems, including its creator hub the iQIYI Creator Center, NadouPro, which is a production workflow platform powered by large language models, offline creative centers as well as venture summits. iQIYI said its goal is to help creators "get seen, get paid and get recognized."

The platform now offers more than 6,600 IP titles and 1,600 digital assets, as well as a newly launched script marketplace, iQIYI said yesterday. iQIYI also said in July that the iQIYI Creator Center had added hundreds of thousands of creators since its April revamp, including short-video creators. More than 50,000 micro-dramas and nearly 30,000 micro-animations are now available on the platform.

Revenue-Sharing Model

Under iQIYI’s revenue-sharing rules announced in August, creators are paid a percentage of the revenue the platform attributes to their works. Creators of exclusive short dramas, including AI-generated ones, can receive 100 percent of that revenue. The rate for mid-length dramas without upfront guarantees rises on a tiered basis to as much as 130 percent.

Two AI-generated internet films released in August recouped their production costs within the first week, iQIYI said. Their combined revenue-sharing earnings from box office proceeds topped CNY8 million (USD1.1 million) in the first month. So far this year, iQIYI has released 16 AI-generated micro-dramas under its revenue-sharing model.

However, iQIYI Chief Content Officer Wang Xiaohui said during the company's second-quarter earnings call that long-form dramas and theatrical films will continue to rely mainly on live-action production, with AI being used to help cut costs.

At the event, iQIYI unveiled a slate of more than 350 new titles for 2026 and 2027. The company also released the trailer for its first full-length hybrid AI multi-season drama, "Immortals Over Mortal Love," which combines AI-generated content with live-action performances by professional actors. A period drama combining live-action performances with AI-generated content is scheduled for release next year.

New Growth Areas

On monetization, iQIYI sees advertising on large-screen devices as a new growth area. The proportion of viewing time on iQIYI’s TV platform increased to 50.58 percent in the first half, up from 42.85 percent in 2022, Gong said. However, he said the marketing value of internet-connected TVs has long been underestimated.

iQIYI has launched Baitai Qiantong, a big-data marketing system for household devices. The system can use data from members and multiple devices to identify long-term needs and preferences both at the household and broader group level.

In the second quarter, iQIYI’s non-GAAP operating loss narrowed 12.3 percent from the previous quarter to CNY130.3 million (USD18.2 million) while total revenue climbed 1 percent to CNY6.3 billion (USD880 million).

Its international business has continued to grow rapidly. Membership revenue from iQIYI's overseas service soared 40 percent in the second quarter from a year earlier. Membership revenue in Brazil surged more than 215 percent and in Mexico it jumped more than 150 percent, while Arabic-speaking markets expanded 85 percent.

Micro-dramas have become the company’s second-largest source of overseas membership revenue, with revenue from the category more than quadrupling in the second quarter from a year earlier. The firm said it is already using AI for translation and to localize and distribute overseas content, as well as to produce AI-generated micro-dramas.

Editor: Kim Taylor