A person holds a phone with Baidu Inc's video streaming service iQiyi in Jinan, Shandong province, China, in this May 25, 2016 photo illustration. REUTERS/Stringer

HONG KONG/BEIJING (Reuters) - Baidu Inc's BIDU.O video streaming service iQiyi, a Chinese-style Netflix NFLX.O, is eyeing a potential initial public offering in the United States as early as next year, a person with direct knowledge of the plans said on Tuesday. The listing could value the company at between $8 billion and $10 billion, Bloomberg reported earlier, citing two people familiar with the matter.

The video steaming service, which competes with Tencent Holdings Ltd 0700.HK and Alibaba Holdings Ltd's BABA.N 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.