In New York's Upper West Side, you can spot rock legends walking their dogs at dawn, Hollywood actors arguing with their spouses inside Best Buy, and Anne Hathaway enjoying breakfast with her children. Even after John Lennon's death, Yoko Ono refused to leave the Dakota apartment on 72nd Street. In September 2003, a 12-year-old girl named Brianna LaHara, living in a low-income housing unit in that neighborhood, became famous overnight because she was sued by the Recording Industry Association of America (RIAA). The girl's mother had used KaZaa, a popular file-sharing service at the time, assuming that paying a $29.99 service fee would allow her children to listen to songs by Christina Aguilera and Mariah Carey. Instead, the family received a subpoena, with major record labels demanding $150 million in damages. That year, the RIAA sued 261 internet users across the United States, including college students, unemployed women, photography professors, and a 71-year-old grandfather. Forty of them were New Yorkers. Although all claimed they were unaware that sharing music constituted piracy, the RIAA still labeled them as thieves and robbers. When the news broke, the American public was outraged. People generously sent money to the girl's family, accusing the RIAA and the record companies behind it of launching a reign of terror against children and the elderly, calling such bullying behavior the Taliban of the music industry. Although the family eventually settled with the RIAA for $2,000, the RIAA still publicly read aloud the girl's letter of apology. That same year, Gong Yu led Focus Real Estate Network into Sohu, and seven years later founded iQiyi. For over 20 years, the media has described Gong Yu as a nice guy who is willing to take losses. Unexpectedly, this nice guy has now learned how to make ordinary people prove how many bowls of noodles they ate.
Where the tale begins
In "Camel Xiangzi," Hu Niu's father, Liu Siye, the owner of a rickshaw company, was domineering his whole life. He said of himself: even his farts would leave a crater. That was the old society's reactionary secret society. Today, Mr. Zhao, who runs a car rental business in Huizhou, Guangdong, owns a fleet of 100 vehicles and is a very nice Cantonese young man. Yet this car rental owner received a subpoena from the Huizhou Intermediate People's Court in August this year—iQiyi had sued him. The reason: his company's vehicle had been installed with Xunlei Browser and played iQiyi's exclusively copyrighted show "Burning Sin," leading to a joint lawsuit demanding 50,000 yuan in compensation from Mr. Zhao's company. When Mr. Zhao later reviewed the materials, he was baffled, because the plaintiff claimed Xunlei Browser was pre-installed by the car rental company. As a seasoned driver, Mr. Zhao was stunned. Who would install Xunlei in a car? A car has no toilet paper or anything; the content inside can only be watched at home with the door closed, right? He then began to carefully study the details. From the vehicle's backend system, he discovered that Xunlei Browser was installed at 11:28 AM on May 8. He also found the name of the renter at that time: Jiahao. Looking at this very internet-savvy name, Mr. Zhao glanced again at the lawsuit materials. How could this be the same name as iQiyi's代理 lawyer? Mr. Zhao tried hard to recall the details. He remembered that when renting the car, Jiahao said he was using his girlfriend's driver's license and repeatedly asked whether the model was a BYD 2024 Qin Plus. After picking up the car at the airport, Jiahao parked it within a ten-kilometer radius of the airport, calmly downloaded Xunlei Browser, watched "Burning Sin," and then returned the car early at 8 PM, citing an argument with his girlfriend. Three months later, Mr. Zhao received the subpoena. The other party not only demanded 50,000 yuan in compensation but also required that his BYD Qin Plus be taken out of service. Huizhou is a place where Wen Tianxiang resisted the Mongols, Yu Dayou fought Japanese pirates, and Chen Jinnan, Fang Shiyu, and Hong Xiguan fought to restore the Ming Dynasty. Furious, Mr. Zhao felt he had been set up by Jiahao and the mastermind behind the scenes. He decided to fight back. He treated lawyer friends to tea and meals, studied the case carefully, and decided to file a counterclaim while also contacting the media. On October 14, the New Yellow River client, under the Jinan Daily Newspaper Group, reported on the matter. Two days later, Mr. Zhao received notice—iQiyi had withdrawn the lawsuit. In the New Yellow River report, this was not iQiyi's first copyright lawsuit against ordinary people. Mr. Mao, head of a car rental company in Shanghai, told New Yellow River reporters that in March last year, someone rented a GAC Aion vehicle, the only new energy car in the company. The renter rented it for 12 hours and drove only a few kilometers. Mr. Mao was puzzled at the time why the pickup location was across the street from the Yangpu District Notary Office in Shanghai. Why else? Of course, for convenience in collecting evidence. The renter immediately photographed the order, vehicle identification number, business license, and vehicle appearance for evidence. Then, less than a month later, the company received iQiyi's lawsuit, with Bilibili as the first defendant and them as the second defendant. The renter had opened Bilibili in the car and searched and watched four films involving iQiyi copyrights. Afterwards, iQiyi filed four separate infringement lawsuits against their company for these four films, each demanding 50,000 yuan in compensation. Similar evidence collection and litigation processes also occurred in Fujian, Jiangsu, and other places. Alongside defendants like Xunlei, Bilibili, and Kuaishou, there were car rental company owners everywhere. "Cart, boat, inn, foot, broker—even if innocent, they should be killed." Most of us just say this, but some people apparently take it seriously. The plaintiff, who so intensively attacked local small business owners, even made some local courts unable to bear it. Last summer, iQiyi sued Kuaishou and a car rental company in Ningde, Fujian, for infringement, demanding 300,000 yuan from the rental company. The Ningde Intermediate People's Court's statement during the trial—let me translate it for everyone. Someone (I'm not saying whose family member) installed Kuaishou on someone else's car to play pirated content. If you have the ability, go directly after Kuaishou. What kind of skill is it to go after ordinary people?
The numbers behind the business
Since its listing in 2018, iQiyi has only been profitable in 2023 and 2024. Why is that? I asked a friend, who said some private matters can't be discussed, fearing they might also become defendants. So let's talk about what can be said. Domestic video platforms all started by imitating YouTube. The first imitators, Youku and Tudou, were both founded in 2005, directly copying YouTube's UGC model. By the time Gong Yu and iQiyi appeared, they had already been at it for five years. So iQiyi initially benchmarked against another American streaming company, Hulu. Licensed, high-definition, professional, and polished long videos have always been iQiyi's direction. The media summarized iQiyi's model as buying copyrights, producing original content, reducing costs, controlling losses, and betting on hits. For this model to work, on one hand, there must be enough good content to stimulate user subscriptions and advertiser spending; on the other hand, content costs must be controlled. In recent years, iQiyi's content costs as a proportion of revenue have exceeded 50%. Works of the magnitude of "The Knockout" cannot be guaranteed for mass production, and there is little room left for cost compression. Membership revenue has consistently accounted for 60% of iQiyi's revenue. Apart from the surge during "The Knockout" in 2023, it has been continuously declining in recent years. iQiyi's total revenue for the full year of 2025 was 27.29 billion yuan, down nearly 7% year-on-year. As the pillar, membership service revenue was 16.81 billion yuan, down about 5% year-on-year. In the first quarter of 2026, total revenue fell 13% year-on-year, and second-quarter revenue continued to decline by 5% year-on-year. This kind of difficulty was recorded long ago in "Dream of the Red Chamber." In Chapter 55, Wang Xifeng tells Ping'er that the household spends more than it brings in. If they don't plan for savings early, in a few years everything will be lost. In recent years, China's film and television industry has been in a prolonged winter. Although it has the most cinema screens in the world, box office revenue in the first half of this year was only about 17.35 billion yuan, down about 40.6% year-on-year; National Day holiday box office was 1.165 billion yuan, down about 37% year-on-year, falling back to 2014 levels. With things this bad, everyone must find ways to make money. Let's go back to "Dream of the Red Chamber." As the mansion's income gradually shrank and expenses could not be cut, the Jia family carried out various reforms—usury, selling jewelry, stealing the old lady's valuables, not buying snacks and stationery for the young ladies and masters, and even contracting out the bamboo groves, ponds, and flowers of the Grand View Garden to maids and servants, earning 400 taels of silver a year. These petty measures were utterly useless and could not fill the mansion's huge deficit. To really make money, one had to take on litigation—intervening in lawsuits. Wang Xifeng, entrusted by an old nun to interfere in the marriage contract between the Zhang family and the garrison family, earned 3,000 taels from just one case. Gong Yu's statements in recent years include, but are not limited to, calling so-called secondary creation content that combines unauthorized content with one's own content "soft piracy"; and saying that those born after 1995 and 2000 generally consider watching pirated content shameful. I understand him. His company basically loses money every year, and then he looks at Bilibili and Kuaishou next door—one with net profit of over 500 million in the first half of the year, the other over 7 billion. Wouldn't you be angry? The weapon of criticism cannot replace the criticism of weapons. Gong Yu has finally figured this out in the past two years. Last June, the Nantong Intermediate People's Court in Jiangsu Province ordered Kuaishou to pay iQiyi 33 million yuan because during the hit run of "The Knockout," there was a large amount of related secondary creation content on Kuaishou. One case can earn tens of millions. If you win 10, wouldn't you be profitable directly? If you win 100, wouldn't you get rich, brother? I saw media statistics showing that from 2019 to now, iQiyi has filed at least 7,000 lawsuits. If the case files were connected, it would truly be like Xiahou Dun looking at Louis XVI—no end in sight. Twenty-five years ago, when Gong Yu's Focus Network was struggling internally and externally, his Honda sedan was stolen from Huibin Building. Not just the car, but the camera, lenses, and daily necessities he had just bought from the supermarket were all gone. The thief was a master: it took just tens of seconds. As a stubborn Gemini, he later bought an identical car and an identical set of lenses. He couldn't buy an identical oil painting. When my car is stolen, I go find Xiao Jieba. When Edison Chen's camera is lost, he goes to the computer shop owner. When Gong Yu's TV dramas are pirated, why go after the car rental company owner? You can't make everyone become Joseph K. in Kafka's "The Trial," waking up one morning as a defendant without anyone telling him what crime he committed; the court's door opens only for him, and the gatekeeper says only: "This case is waiting for you."
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