IQiyi enters the theme park industry: What's its confidence?
Editor-in-chief | Yang Ming
Editor | Jing Xiangyuan
Source | Lieyun Selection
Although the outside world often likes to regard iQiyi as the Chinese Netflix, iQiyi CEO Gong Yu has repeatedly mentioned in public that iQiyi's business model is more similar to Disney's.
Recently, iQiyi announced that its first global offline theme park project will be located in Yangzhou, Jiangsu Province, and is expected to open this year.
To a certain extent, iQiyi has more possibilities to benchmark against Disney—the essence of Disney's business model lies in its ability to create its own IPs. According to the plan, iQiyi Theme Park will use cutting-edge digital technology and the integration of film and television IPs to bring an immersive entertainment experience to tourists.
As early as the second-quarter earnings conference last year, iQiyi placed its offline IP experience business in a prominent position. Now, Gong Yu has frankly stated that iQiyi Theme Park is the most important part of iQiyi's offline experience business development.
All signs indicate that iQiyi's determination to build an offline entertainment empire and explore the monetization of IP value is becoming increasingly firm.
Unlike the strategy of Disney and Universal Studios, which are clustered in first-tier cities, iQiyi Theme Park has chosen Yangzhou as its launch location.
Zhang Hang, senior vice president and general manager of the Experience Business Division of iQiyi, told Lieyun that Yangzhou receives over 100 million tourists annually, with a growing percentage of young people and an increasing overnight stay rate. iQiyi's technology-based theme park complements and promotes other cultural and tourism projects in the region.
According to the plan, iQiyi Theme Park will consist of seven major sections: a full-sensory theater, a holographic projection space, an immersive performing arts theater, film and television scene interaction, NPC interactive experience, party time MR games, and themed activities, and will also include themed catering and IP derivatives.
As we all know, traditional theme parks typically require large investments, have long payback periods, and face challenges such as IP aging, actor costs and management, insufficient content interactivity, and high iteration costs. However, with the advancement of game engines, virtual reality, AI, and other technologies, the necessary conditions for the miniaturization, stronger interaction, and faster iteration of theme parks have been created.
Zhang Hang said that since 2017, the company has been carrying out content and engineering innovation around offline immersive interactive experience scenarios. Years of content development have accumulated more and more sustainable national IPs, hoping to create value for users and the industry from two aspects: improving content experience and improving production and operation efficiency.
From the perspective of the entire industry, iQiyi's layout of offline theme parks may reflect its consideration of the commercial potential of theme parks.
According to the financial report of Walt Disney Company, Disney's total revenue in fiscal year 2024 was approximately US$91.361 billion, a year-on-year increase of 3%; the net profit for the entire fiscal year was approximately US$4.972 billion, a year-on-year increase of approximately 111%, far exceeding market expectations.
Specifically, the entertainment segment revenue was approximately US$41.186 billion, a year-on-year increase of approximately 1%; the sports segment revenue was approximately US$17.619 billion, a year-on-year increase of approximately 3%; and the experience segment revenue was approximately US$34.151 billion, a year-on-year increase of approximately 5%. The experience segment revenue refers to the revenue from Disney theme park-related services.
This shows that Disney's theme park business contributes more than one-third of its parent company's revenue and is growing strongly, demonstrating its strong IP monetization capabilities.
Universal Studios has also demonstrated its "money-making magic." The Global Theme Park Report shows that in 2023,
Universal Studios Beijing
received 9 million visitors, a 109% increase compared to 4.3 million in 2022. In 2023, Comcast, Universal Studios' parent company, achieved a revenue of US$8.947 billion from its five Universal theme parks worldwide, a year-on-year increase of 18.6%.
The "In-depth Study of the Current Status and Development Trend Analysis Report of China's Theme Park Industry (2025-2032)" shows that in recent years, with the recovery of the tourism market and the growing demand for cultural entertainment and leisure tourism among the public, theme parks have become the choice for many people's "nearby travel," driving the continuous expansion of the market scale.
Data shows that as of September 2023, the market penetration rate of China's theme park market is only 27%, while the average level in developed markets is as high as 68%. It is expected that the market size will exceed 90 billion yuan by the end of 2025.
Seeing the booming development and growth potential of the theme park market, iQiyi's move to enter the market seems understandable. Although iQiyi Theme Park has similarities to Disney theme parks in terms of model, there are also many differences.
On the one hand, Disney theme parks have developed over many years and have accumulated a large number of classic film and television IPs, such as
Snow White
Mickey Mouse and Donald Duck, The Lion King, etc. In comparison, iQiyi still has a significant gap with Disney in terms of the number and influence of IPs.
On the other hand, in terms of operational management experience, Disney theme parks have formed a mature system in park planning and design, project development and operation, etc., through long-term practice, while iQiyi is still in the exploration stage in this aspect.
It can be said that iQiyi Theme Park still has a long way to go to reach the level of Disney theme parks, but this does not prevent iQiyi from learning from Disney's successful experience.
"From Disney's financial report, we can see that the experience business (theme parks and IP derivative authorization) accounts for a very high proportion of Disney's revenue and profit. We will take this as our goal." Zhang Hang revealed that at this stage, the team will spend more energy on the initial park products and operation polishing, using the rapid iteration thinking of the Internet and the pursuit of ultimate experience to ensure the success of the initial park operation. First, we will make a single-store model a success, and then launch global replication at the right time.
Exploring Offline Business Ecosystem with IP
The creation of iQiyi Theme Park is considered the most important part of iQiyi's offline experience business development. In fact, iQiyi has already accumulated some experience in the development of its offline business ecosystem and is not a newcomer.
As early as July 2023, iQiyi took an important step in its offline layout, with the official opening of its first offline theme park focusing on family growth entertainment—iQiyi Qibabu Theme Park.
This park is located in the World Horticultural Expo Resort in Yanqing, Beijing, and incorporates iQiyi's self-produced animated IP
Qiba Bu
creating a space that combines three major IP theme pavilions, seven theme areas, and over 200 recreational projects, building a full-scenario family entertainment and interaction space.
Although Qiba Bu Park mainly targets parent-child groups and may not be comparable to the currently planned iQiyi Park in terms of scale and influence, it is undoubtedly a valuable practical exploration of iQiyi's offline efforts.
In addition to theme parks, iQiyi has long been involved in other offline entertainment areas.
As early as 2017, iQiyi began to focus on the combination of VR technology and offline content, utilizing offline physical spaces and devices to create a series of immersive theaters.
In 2023, iQiyi launched the "Wind from Luoyang" immersive theater, a "destination product" aimed at urban scenarios. The experience lasts about 60 minutes and combines live-action performances with VR experiences, greatly restoring the scenes in the drama. During each performance, tourists can wear VR equipment, play the roles of characters in the drama, and act according to the plot settings.
The "Tang Dynasty Ghost Stories: Western Journey" immersive theater serves the tourism and cultural scene, lasting about 20 minutes. It is located in the commercial districts of tourism and cultural cities to cope with the tidal flow of tourists and the instantaneous large traffic flow during holidays. It has achieved good market returns and feedback.
Source: Company provided image
In recent years, iQiyi has accumulated rich film and television IP resources, including "Wind from Luoyang," "Love Between Fairy and Devil," and "Tang Dynasty Ghost Stories: Western Journey." These hit IPs have a large fan base. Currently, iQiyi has built more than 40 immersive theater stores in more than 20 cities across China. The creative methods and process pipelines accumulated in the development of immersive theater content can also continuously update the immersive theater experience for new IPs in iQiyi Park.
In the second-quarter 2024 financial report, iQiyi mentioned that the diversified revenue and influence of dramas have extended from online to offline entertainment, tourism, and consumer goods fields.
Gong Yu said: "Currently, the proportion of self-produced dramas in the top dramas launched by iQiyi each quarter has steadily increased from 50% to about 70%. Content IP is iQiyi's core asset. Promoting the diversified monetization of content IP, including the monetization of offline businesses, is an important and continuous long-term work for the company, and it is also the key to enhancing the company's long-term value and competitiveness. We expect the offline experience business to become a second growth curve in the future."
iQiyi needs new growth
Currently, iQiyi has reached a critical juncture. This juncture is that, as the dividend of mobile internet traffic gradually disappears, the traffic base of long-video platforms is gradually reaching a bottleneck.
Reflected in performance, according to the financial report, iQiyi's 2024 annual revenue was 29.23 billion yuan, down 8% year-on-year. Behind the decline in performance is the double setback of membership services and advertising business, two core sectors. In terms of membership services, the annual revenue from membership services in 2024 was 17.76 billion yuan, down 13% from 2023; in terms of advertising business, the revenue from online advertising services in 2024 was 5.71 billion yuan, down 8% from 2023.
Under this background, iQiyi's cross-border theme park is an active change in the face of the growth ceiling of the long-video industry. At the same time, iQiyi is vigorously promoting a dual-engine strategy of long and short videos, attempting to reshape its competitive advantage and open up new growth space.
In a constantly changing external environment, iQiyi has also built a content ecosystem that synergistically develops "long + short" content. Gong Yu said in the earnings call that the strong return of high-quality long-form videos and continuous innovation in the micro-drama field will be the dual engines driving continued growth in 2025.
In terms of long-form videos, iQiyi will continue to improve the quality and market share of its top-tier content to increase membership revenue. In the fourth quarter of 2024, iQiyi's total market share of dramas ranked first in the industry, and its annual Yunhe data market share also topped the list. It needs to continue to maintain this advantage in the future.
In the micro-short drama field, iQiyi pioneered the "micro-theater" and "short-theater" classification system, accurately meeting the different needs of users for fragmented and immersive viewing. The platform has completed product transformation and user experience optimization, expanding the content scale to over 10,000, and optimizing the advertising delivery system.
From vigorously promoting a dual-engine strategy of long and short videos to cross-border offline theme parks, iQiyi is adapting to market changes and bringing more new expectations to the market.
