Baidu’s Video Streaming Service To Be Publicly Listed In The U.S.

The video streaming service of Chinese online search giant Baidu is being taken public in the United States. Known as iQiyi, the video streaming service intends to raise a minimum of $1.5 billion in the IPO which was filed earlier this week. The ticker symbol of the service will be IQ.

According to Karen Chan, an analyst at Jefferies, iQiyi has a subscriber base of around 50 million and a market share of 28% in China. iQiyi generates revenues not only from subscriptions but also from selling advertising.

“Online advertising grew 44% in 2017 to $1.3 billion (47% of total revenue), largely on par with industry average. This is largely driven by 16.3% year-over-year increase in average brand ad revenue per advertiser and in-feed ad service launched in 2016,” wrote Chan in a client note.

Not yet profitable

At the moment about a fifth of Baidu’s revenue is generated by iQiyi. Compared to its U.S. equivalent, Google, that’s a little higher. Though Google doesn’t release separate financials for YouTube estimates from brokerage firm William Blair indicate that in 2018 revenue from the video sharing site will be $18.4 billion which translates to around 14% of Alphabet’s revenues.

According to William Blair iQiyi is yet to become profitable while YouTube recorded its first annual profit four years ago. iQiyi has also witnessed cash burn as a result of acquiring licensed content. Last year iQiyi generated revenues of $2.54 billion and this was a year-over-year increase of 54%.

Programming recommendations

The on-demand video content of iQiyi is like that of Netflix and offers movie and television shows. Like its American equivalent Netflix, iQiyi also employs artificial intelligence tools with a view to making programming recommendations to its subscribers. After the IPO Baidu will still own the majority stake in iQiyi. Currently Baidu’s stake in the video streaming service is 69.6%.

Baidu’s decision to publicly list iQiyi comes in the wake of the online search giant’s researchers an AI tool based on deep learning which can mimic voices after listening for under a minute. According to the Baidu’s Leo Zou it would previously have required numerous examples before a model could learn but this has now been reduced to a fraction of that.

Per Zou some of the uses of voice cloning would be assisting patients who had lost their voices. The technology could also be applied in speech-to-speech language translation as well as in the development of digital content such as video games and audio books.

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