Of all the things that could happen in China’s online video market, the emergence of a single all-powerful uber-player that has inhaled all competition is unlikely. The reason is that content producers and advertisers don’t favour a market with only one online content distribution platform. “There is a large diversity in content and user preferences that cannot be captured by one player only,” says Gong Yu, the founder and chief executive of online giant iQiyi, which has upwards of 66.2 million paying subscribers. At the same time, he believes further fragmentation is unlikely, “since the small and medium providers will not survive the high entry barriers of content costs, technology and user base”.

The massive changes looming in entertainment will come from artificial intelligence (AI) used everywhere from choosing drama scripts to customer service. Speaking during this year’s Mipcom market in Cannes in October, Yu said AI technology was “re-shaping the future of the entertainment industry”.

“In an AI enabled era, it will be as if each user has a smart personal assistant providing personalised recommendations and even bespoke content. Using machine learning to provide personalised services is a key trend going forward and will reshape the entertainment industry over the next 10 to 20 years much more so than the internet did over the past three decades,” he says.

There’s not a sliver of entertainment that won’t be impacted, from script evaluation, casting, editing and box office prediction to content tagging, thumbnail generation, monetisation and customer service.

“AI tech can be applied to many aspects of online video,” he adds, including as a “guardian of IP” to identify audio and video fingerprints and establish a copyright database.

Alongside the rise of AI everything, Yu forecasts the continued shift in China’s online video market from the current heavy reliance on acquired premium content driving advertising and subscription revenue towards original premium content.

The move into iQiyi originals is already wildly successful; iQiyi’s costume drama, The Story of Yanxi Palace, co-produced with Huanyu Film Works, had been streamed more than 15 billion times by the time the 70-episode series finale aired on 4 October this year, iQiyi says. The Qing Dynasty tale of scheming concubines and palace intrigue has been sold to more than 70 countries/regions.

Yu outlined three key benefits of originals: greater differentiation between platforms, greater control of content costs, and more ways to monetise, including advertising seamlessly embedded into content to “facilitate a more natural viewing experience”. Plus, he added, original IP has long-term value and can be monetised across several windows, ultimately returning to the paid-content online library.

iQiyi’s broad range of originals so far include drama series Tientsin Mystic and Burning Ice, variety shows Hot Blood Dance Crew and Clash Bots, and feature films Youth, The Pluto Moment and Blue Amber. Next year’s drama slate includes The City of Chaos, The Thunder, The Eight and The Legend of the White Snake.

A few days after his appearance in Cannes, Yu’s team in Shanghai unveiled the platform’s 2019 content strategy, with more than 200 new shows across a range of genres, including movies, drama and animation.

Also on next year’s slate is a new season of music reality show, The Rap of China, and another season of Idol Producer, along with a new focus on shorter drama series of 12 episodes and the first drama series designed to be watched in portrait mode on smart phones. ”We strongly believe that watching content in portrait mode on a phone will soon become a mainstream method of content consumption,” Yu says, highlighting his company-wide emphasis on constant innovation.

At the same time, the platform scrapped its view count feature in favour of an AI-driven “heat index” video evaluation system – an innovation designed to combat click farming and view distortion.

Yu believes AI will drive diverse viewing. “The proliferation of AI is sure to result in a significantly more diverse forms of content consumption,” he says. And that can only be good.

Published on ContentAsia's Issue Six 2018, 29 October 2018