Baidu started its online video business back in 2012 in an attempt to capture the shifting customer demand from television to online video streaming. Baidu’s online video business includes its iQiyi video platform, which has an extensive video content library that includes licensed movies, television series, cartoons, variety shows and other programs. In addition to sourcing licensed content, iQiyi also produces a wide array of original content and provides online community services to facilitate user communication and interaction – similar to what Netflix does in the U.S. and internationally. According to our estimates, the online video division makes up approximately 5% of our $188 price estimate for Baidu’s stock. Our price estimate is roughly 15% higher than the current market price.
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