(chinadaily.com.cn, 13 Aug, 2013) Another big merger is likely to happen in China’s online video market in the coming six months to one year, said Gong Yu, CEO and founder of iQiyi, a popular online video website acquired by Baidu late last year.
Gong made the prediction at the 2013 China Internet Conference in Beijing on Monday, saying consolidation in the sector will continue due to the large number of online video service providers in China.
“Those companies which sell videos to service providers usually ask for very high prices because there are so many websites like us, which are eager to buy good content. On the other hand, advertisement companies can easily bargain with us and get a cheaper deal because of the huge competition among video websites,” Gong said.
He added that online video service providers are stuck in the middle and the challenges of the times will ensure consolidation continues.
Gong’s company merged with PPStream Inc’s online video business in May, which was a big move in China’s online-video market after a merger between Youku.com Inc and its main rival Tudou Holdings Ltd in 2012.
Gong said it is still to early to say if the merger will bring more income for iQiyi this year, but he said the integration of the two companies has progressed better than they expected and the merger has already shown signs of shrinking operations costs.