China’s Netflix Expects AI to Create Bulk of Shows in Five Years

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China’s Netflix Expects AI to Create Bulk of Shows in Five Years.

companies :: 4hrs ago :: source - blommberg

By Bloomberg News

(Bloomberg) -- IQiyi Inc. expects AI to create the bulk of its films and shows in five years, a monumental industry shift that spurred the Netflix-style streaming service to begin the biggest corporate overhaul since its 2010 inception.

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The Beijing-based company plans to convert its video app and website into more of a social media destination that hosts mainly AI-generated content as video models mature, founder and Chief Executive Officer Gong Yu said in an interview at iQiyi’s annual content showcase. As part of that transition, iQiyi officially debuted the Nadou Pro suite Monday — an AI toolkit it said can handle almost every aspect of filmmaking, from scriptwriting and storyboards to final rendering.

IQiyi aims to become one of the entertainment industry’s biggest adopters of and advocates for artificial intelligence — part of an internal effort to reverse a yearslong sales slump triggered by the rise of short-video platforms like ByteDance Ltd.’s Douyin.

Gong pledged to maintain investment in professionally produced content but said a portion of the company’s capital will be reallocated to bolster iQiyi’s AI services in the short term. That includes a new social-video app executives unveiled Monday, designed to capture the mass-market appeal of OpenAI’s now-defunct Sora video generator. IQiyi also aims to release a commercially successful AI-generated film as soon as this summer.

“It’s once in a decade,” Gong told an audience of producers and directors in the capital. “We have to take the tide as it comes.”

IQiyi, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. together dominate video streaming in China, though audiences are more fragmented than in the US because of short video formats.

The Baidu Inc. subsidiary’s moves coincide with an AI debate raging in Hollywood, which is grappling with widespread layoffs and questions over how the technology will reshape the industry. From Netflix Inc. to Amazon.com Inc., major studios are increasingly experimenting with AI technology to cut production costs. Amazon has created an in-house team to deploy AI across its film and TV work.

The Chinese company’s Nadou software relies on AI models from competitors including Alibaba, ByteDance and Kuaishou Technology. IQiyi is betting its deep ties to professional filmmakers will create a more seamless, industry-specific workflow. The company also plans to launch an international version of the tool, powered by models including Alphabet Inc.’s Google Veo 3.1, Gong said.

The Nadou suite also features an IP library, allowing creators to tap iQiyi’s catalog of virtual assets and signed talent to generate new content. To showcase the tech, the Beijing-based streamer is flooding its platform with AI-generated titles, starting with a debut slate of 16 Nadou-produced films spanning sci-fi and anime. And to encourage more AI content creators, iQiyi plans to pay those producers an additional 20% cut of advertising and membership fees, Gong said.

IQiyi’s revenue is estimated to have slumped 13% in the first quarter of this year. The company, which is listed in the US, filed for a Hong Kong listing last month, joining a wave of Chinese internet peers seeking to tap capital closer to home.

To offset the squeeze, iQiyi is also pivoting toward high-growth niches and physical entertainment. Overseas membership revenue surged more than 30% last year, though it remains a sliver of the company’s topline. It’s also monetizing its library in the real world, having opened an indoor theme park in the Chinese city of Yangzhou.

Gong sees China’s film industry trapped in a vicious cycle, where ballooning production costs and investment risks are stifling output just as users migrate to rival entertainment formats, he said. He believes AI will break the shackles of this stagnation by powering a surge in new content.

“I’m confident this is the right call — we’ll have our answer in a year’s time,” Gong said.

(Updates with CEO interview throughout.)