On the evening of November 27, the press announced today that Alibaba and Tencent had halted talks to buy the iQiyi shares of Baidu. The acquisition has however been halted. ByteDance is also assessing the possibility of purchasing iQiyi shares, but this alternative is unlikely to be considered by Baidu.
18:05 GMT, Friday, November 27, 2020
“No comment.”No comment.
Baidu answered that the reports are untrue, iQiyi is an important part of the ecological content policy of Baidu, and Baidu will continue to promote the growth of iQiyi.
In answer, Bytedance replied: there is no such thing, that is not real.
Reuters announced earlier on November 27 that Alibaba and Tencent had terminated talks to buy Baidu’s stock in iQiyi. Over the next six months, IQiyi plans to collect at least US$1 billion. Alibaba and Tencent disagree with the approximately US$20 billion estimate of iQiyi, and they still face regulatory drawbacks.
Reuters cited two individuals familiar with the matter earlier in the afternoon of June 16 as saying that Tencent plans to become iQiyi’s biggest shareholder. One of the people familiar with the matter said that Tencent had decided to buy shares on an undetermined scale with Baidu, which holds 56.2 percent of iQiyi’s equity, although it is still unclear if Tencent had approached iQiyi.
The persons familiar with the matter described above have pointed out that the proposal is already at an early stage and can be updated at any moment.
Two individuals familiar with the matter were cited by Reuters as saying that Tencent Holdings Co., Ltd. plans to become iQiyi’s biggest shareholder in order to cut costs and boost its online video competitiveness. The above-mentioned person who is familiar with the matter explained bluntly: “The cooperation will increase the bargaining power of both parties in the production and purchase of content, and reduce marketing costs. Otherwise these costs will be used to grab users from each other.”
On June 17, both Tencent and iQiyi replied to this news with no comment.” “Guo Feng, who has been certified on the Baidu App as Baidu’s director of public relations, released a message saying, “Don’t guess. Baidu will continue to help the ecological growth of iQiyi, an important aspect of Baidu’s content-ecological policy.
Tencent’s stock price rose on the day the news came out, Baidu’s stock price also rose, and iQiyi’s stock price rose by 25% . There was a happy stock market.
The living environment of long video platforms is still serious, however since small screens are dominant and short videos are common. At the 8th China Online Audiovisual Meeting, Zhao Gang, general manager of Tencent Video’s living-room business department, said that the advent of short videos has subverted the audiovisual industry and also severely threatened the existence of long videos. “In 2018, the short video track accounted for the same number of users as the long video track. But by 2020, the number of short video users has reached three times as long as the long video track, and the long video track has been continuously compressed. On the brink of crisis.”
At the same time, at this stage, conventional long-term video networks such as iQiyi and Tencent also have to find a benefit process. The third-quarter results report reveals that the quarter’s gross sales for iQiyi reached 1,094,724,000.00 U.S. dollars, a decline of 3 percent year-on-year the net loss reached $1 billion relative to a net loss of $3.7 billion in the same period last year.
In the dilemma of poor membership growth, IQiyi is still stuck. As of 30 September, the cumulative number of iQiyi users was 105 million, 99.5 percent of which were paying subscription members, a decrease of 100,000 month-on-month and a decrease of 1 million year-on-year. The number of members showed both year-on-year and month-on-month negative rise.
In addition to Tencent, Xiaomi and Bytedance are also among the exposed iQiyi customers.
According to a report by AI Finance and Economics, iQiyi launched a new strategic investor, Xiaomi, several years ago, under the leadership of Baidu, and Xiaomi has also intensively explored the prospect of collaboration between Xiaomi Pictures and the original film company of iQiyi.
In the third quarter of 2019, Zhang Yiming and Gong Yu, CEO of Bytedance, met. After talks, Zhang Yiming vowed, in addition to the capital expended this time, to continue to send iQiyi those funds and services every year in the future.
In the end, though the two investments in Xiaomi and Bytedance did not work.
Waves in the long video sector have been surging lately. It appears to announce that long video is about to change from the price raise of members to the sale and purchase of shares of the head video network.