Driven by high-speed internet connections and a thirst for on-demand content, the streaming media industry has witnessed explosive growth over the past decade and spawned a series of streaming giants such as Netflix, Amazon Prime Video and Disney+.

With more than one billion online video users as of mid 2023, China boasts one of the world's largest video streaming markets, according to the 52nd Statistical Report on China's Internet Development issued by the China Internet Network Information Center.

Dominating the landscape of China's video streaming are iQIYI, Youku and Tencent Video, which also spearhead the sector's rapid growth that contributes to China's high-quality development.

On Feb 28, iQIYI, often hailed as the Netflix of China, reported total revenues of 31.9 billion yuan ($4.5 billion) for the 2023 fiscal year, with key financial metrics — total revenues, operating and net profit, and total free cash flow — hitting record highs.

With a commitment to content creation, international reach and cutting-edge technologies, China has become a video streaming powerhouse and is shaping the future of entertainment in Asia and beyond.

Content is king

The cardinal rule in the content marketing industry holds true for video streaming platforms. Since its inception in 2010, iQIYI has been committed to producing long-form video content and has grown to become the go-to platform for Chinese-language content in China and beyond.

What content resonates with Chinese audiences and captures their hearts?

With a glimpse at iQIYI's top 20 must-watch productions, you can find that nine are costume dramas. This shows that period pieces which embody China's rich historical narratives and oriental aesthetics hold a strong appeal for Chinese audiences.

Additionally, themes delving into contemporary lifestyles and social trends are capturing an increasing viewership. Notably, topping the site's chart is The Knockout, a modern drama which was a national phenomenon in 2023.

The show along with other hit titles brought iQIYI 17 million new subscribers and enabled the platform's average daily number of total subscribers to soar to a staggering 129 million for the first quarter of 2023, which is about half of that of Netflix.

Meanwhile, Chinese audiences are also hooked on suspense-filled dramas such as those featured in iQIYI's "Light on Theater" program, various reality shows and online films.

"Monthly ARM (average revenue per membership) grew for five consecutive quarters, which reflected the high attractiveness of our content and the growing value of our membership service," said Gong Yu, founder and chief executive officer of iQIYI, during the company's earnings call.

According to Enlightent, a big data platform for the entertainment industry, iQIYI has ranked No. 1 in drama viewership share for three consecutive years. In 2023, iQIYI broadcast seven out of the top 10 most-viewed new dramas in the Chinese market. In addition to dramas, the giant also dominated the online movie streaming segment with a total viewership share of 47 percent.

"Our market share leadership is deeply rooted in our unique capacity to produce original, premium content," Gong remarked.

In 2023, more than 65 percent of key dramas released by the platform were its original productions, an annual record in its history.

Unleashing greater IP value

In addition to creating premium original content, Chinese streaming giants are also good at creating blockbuster spin-offs to further amplify their value, bringing exciting experience across online and offline channels.

For example, iQIYI developed the iQIYI Chinese Historic City Universe—an expansive universe of various Chinese ancient cities featured in its hit costume dramas.

Based on Luoyang, a 2021 sensational historical mystery series, the company launched the first installment of the universe and monetized through Luoyang-inspired spin-offs including films, games, merchandise and VR immersive theater.

Global presence

Similar to Netflix's global expansion, China's leading video streaming companies look beyond the borders of China.

With a focus on creating beloved Asian content and bringing it to the world, iQIYI launched its international app in 2019, distributing thousands of episodes of TV dramas, variety shows, documentaries and over 500 films in more than 190 countries and regions.

2023 saw Chinese dramas continue to enthrall global audiences and advertisers, as they contributed more than 50 percent of total revenues in 2023 for iQIYI International, according to the company's earnings report.

"Story of Kunning Palace led rankings in many markets, setting record high metrics for Chinese content on our overseas platform. Meanwhile, A Journey to Love also dominated many charts in South East Asia, North America and Australia during the broadcasting period," said Gong.

Additionally, the company has been developing original productions in Southeast Asian languages for local markets and distributes them worldwide.

Rampas Cintaku, a Malay-language drama, is a prime example. The 2022 hit show has enthralled a global audience with over 100 million views. iQIYI recently debuted the Malaysian drama in the Chinese mainland, further spreading its appeal beyond its home turf.

Gong said that in 2024, his company will continue promoting Chinese dramas and local content in partnership with Southeast Asian TV stations, and seek diverse IP monetization opportunities.

Embracing cutting-edge technologies

An industry driven by technological advancements, China's video streaming sector has shown tremendous drive in adopting emerging technologies to empower content creation and marketing as well as improve user experience.

For example, iQIYI has pioneered virtual production in using its digital assets, such as 3D scanned set locations of its original productions, to create various types of content, ranging from dramas and films to animations. According to the company, this technology was used to capture over 3,000 minutes of footage for The Story of Mystics, a costume drama by iQIYI.

Leveraging Generative AI, the company assists content creators in better evaluating scripts and helps marketing teams generate videos and posters.

"These efforts not only improve content production and operation efficiency, but also unleash creative potentials," Gong remarked. "Over the past year, we used AI for mass-producing quality marketing materials, which outperformed manual designs in click-through rates and viewership."

Additionally, iQIYI's AI search capabilities, which can comprehend video content at minute level and generate detailed plot summaries for each playlist, ensure viewers can instantly access desired content. The company's interactive features allow users to send bullet screens, chat and even sing karaoke.