China is set to reverse the course of history and again defy expectations. iQiyi, an on-demand video streaming service, expects their advertising revenue to account for only half of their total revenue for 2016.

“iQiyi’s total revenue for 2016 will be more than 10 billion RMB. Advertising accounts for only half of that with the rest coming from user-facing offerings [i.e., premium subscriptions] and other sources,” said Gong Yu, CEO of iQiyi, at the 2016 China Internet Audio-Visual Conference (referred to as CIAVC hereafter) last week.

Major Chinese on-demand video sites are still struggling with fierce competition and profitability. Since 2015, they have heavily promoted paid subscriptions in an effort to diversify their revenue structure. The hope is to move away from an advertising model to a model based on paid subscriptions. In June of this year, Gong Yu told Yicai (report in Chinese) that they want to reduce advertising from about 75% in 2015 to around 33% in 2016.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com