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Tencent may be eyeing a move to take over rival video streaming firm iQIYI
Chinese social media and entertainment giant Tencent may be eyeing a move to take over rival video streaming firm iQIYI. A combination of the two would a create streaming platform comparable in scale to Netflix. The Reuters news agency on Tuesday cited two unnamed sources said to be familiar with the matter. They said plans are at an early stage and that Tencent may not yet have approached iQIYI.

The sources said a merger “would lower costs and counter competition in a sector boosted by stay-at-home virus policies.” Streaming video has enjoyed huge growth in China over the past five years, since smart phones became the norm in the Middle Kingdom. It has also benefited from the financial arms of Tencent and Alibaba making online and mobile payments ridiculously easy in every walk of Chinese life.

Reuters’ report adds that  the “plans are at an early stage and subject to change”, and that potential deal between iQIYI and Tencent would see the latter company move closer “to becoming China’s dominant online entertainment provider”. A part-acquisition of iQIYI wouldn’t be Tencent’s only headline-grabbing buy of late: earlier this month, Tencent, partly via Tencent Music Entertainment, acquired a 1.6% stake in Warner Music Group. If you need Buy Tencent VIP Account, you can visit our site

At the end of March, Tencent Video reported to have 112 million paying subscribers, while iQIYI claimed to have 119 million. One of Reuter’s sources are cited as saying: “A tie-up would improve their bargaining power when producing and purchasing content, and lower marketing costs that would otherwise be spent on grabbing users from each other.”

A combination of the two platforms would reduce costs and create even greater scale at a time when the rate of organic growth in the sector has slowed. Additionally, it would potentially help fend off the growing challenge to their Chinese business models from short-form video companies such Bytedance (TikTok/Douyin) and Bilibili, and allow unduplicated expansion into Asian markets.
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