China's iQiyi considers U.S. listing as early as 2018: source

The video steaming service, which competes with Tencent Holdings Ltd and Alibaba Holdings Ltd's Youku Tudou, is set to start negotiations with banks and deal arrangers, Bloomberg said.

The up to $10 billion valuation would still be a fraction of U.S. rival Netflix's near $80 billion market capitalization. iQiyi had 481 million monthly active users as of the end of last year, data cited by Baidu shows.

Baidu and iQiyi representatives declined to comment when contacted by Reuters on Tuesday. The source declined to be identified because he was not authorized to speak to the media.

The video steaming service that hosts free and subscription services said in February it had raised $1.53 billion in new funds to compete with rivals in the country's hotly contested online entertainment sector.

That investment round included funds from Baidu, Hillhouse Capital, IDG Capital and Sequoia Capital.

China's online market for paid-for content has grown fast as the country cracks down on once rampant piracy, but has required huge amounts of investment from firms as they look to lure in viewers with premium shows from drama to sport.

(Reporting by Kane Wu in HONG KONG, Cate Cadell in BEIJING and Shubham Kalia in BENGALURU; Writing by Adam Jourdan; Editing by Muralikumar Anantharaman and Stephen Coates)