IQiyi, the Chinese streaming service owned by Baidu, filed for an IPO on Tuesday with the U.S. Securities and Exchange Commission. The move had been expected for some time and sets the initial offering at up to $1.5B. That figure is likely to shift with previous reports suggesting an offering would value the company at $8B-$10B. The company plans to list its American Depository Shares on the NASDAQ under the symbol IQ.
The streaming giant, which has deals with such offshore partners as Netflix, Lionsgate, Warner Bros, Fox, NBCU and the BFI, said in its filing that it has 50.8M subscribers. It also noted 2017 losses of $574.4M on $2.67B in revenues. In a version of the U.S. battle among streamers Netflix, Amazon and Hulu, the three Chinese rivals — Alibaba, Tencent and Baidu — have all invested in video content. IQiyi acknowledged in its filing that it faces significant competition in China, primarily from Tencent Video and the Alibaba-backed Youku Tudou.
IQiyi also produces its own content and acquires from third-parties. It said it plans to use 50% of the net proceeds from the IPO to expand and enhance its content offerings. One point to consider ahead is the potential escalation of tension between the growth of online video, which has been less censored, and a regulatory crackdown to bring it in line with what’s been approved for radio, film and TV. “The government has been more reactive and less proactive when it comes to what’s acceptable for online video, trying to get people and platforms to engage in self-censorship,” USC professor Stanley Rosen told us recently. “The tug-of-war should continue in 2018,” he said.
The filing comes after a big 2017 for Chinese companies listing in the U.S. According to Bloomberg data, 21 businesses went public on American exchanges last year, raising a combined $3.9B.