Chinese smart-phone manufacturer Xiaomi is investing in rival streaming platforms Youku Tudou and iQiyi as its gears up to expand into the content business.
Xiaomi and Youku Tudou are entering into a wide-ranging collaboration through which they will jointly develop content and technology. Xiaomi will also invest in Youku Tudou by acquiring its stock on the open market.
In addition, Xiaomi will license content from Youku Tudou and the two companies will jointly invest in the production and distribution of online video content, including movies.
“Both Youku Tudou and Xiaomi have been pioneering multi-screen ecosystem development in the mobile internet era. With the new partnership, we’ll leverage our respective capabilities to strengthen our ecosystems and to enhance user experience,” said Youku Tudou chairman and CEO Victor Koo.
Xiaomi chairman and CEO Lei Jun said the collaboration would be the first project for Chen Tong, a former Sina executive who recently joined Xiaomi as vice president of content investment. Xiaomi, which is the world third largest smart-phone manufacturer behind Samsung and Apple, announced at the beginning of this month that it would be investing $1bn in content.
Separately, local press has reported that Xiaomi is also investing $300m in iQiyi, a rival streaming platform to Youku Tudou. iQiyi is also receiving an additional $300m investment from its parent company, search engine giant Baidu, meaning it will be well-financed as it pursues its own content production plans.
iQiyi announced in July that it is launching a content arm, iQiyi Motion Pictures, which will produce seven local films and one Hollywood film each year.