Author|Li Xiaojiu
Editor|Wangshan
Iqiyi released its unaudited financial report for the third quarter ended September 30, 2020. Total revenue for the third quarter was RMB 7.2 billion (US$1.1 billion) ), a decrease of 3% from the same period in 2019.
iQiyi’s revenue comes from four businesses: membership services, online advertising services, content distribution and other revenues. The business that
accounts for the most and needs the most attention is membership services. Although the number of members decreased in the third quarter, the total number of members in the same period of 2019 was 105.8 million, and it is currently reduced to 104.8 million. However, membership service revenue has increased by 7% year-on-year to 4 billion yuan ($585.5 million). The income growth of
comes from the operation of a "chicken thief" in iQiyi.
In late May, iQiyi officially launched the "Star Diamond VIP Member". Star Diamond VIP members can watch iQiyi advanced on-demand dramas and Star Diamond Cinema movie content, which is equivalent to having another VIP on the original golden VIP. "Star Diamond VIP Member" continuous monthly subscription price is 40 yuan (including 12 yuan in the first month), continuous annual price is 398 yuan, 12 months price is 418 yuan; the original "golden VIP member" continuous monthly subscription price is 25 yuan (Among them, the price of the first month is 19 yuan), the annual price of consecutive packages is 218 yuan, and the price for 12 months is 248 yuan.
secretly increased the price in the name of Super VIP.
On November 13, iQIYI VIP members began to adjust the price. For Android phones, the monthly price was adjusted from RMB 19.8/month to RMB 25/month, and the price for consecutive monthly subscriptions was adjusted from RMB 15/month to RMB 19/month. month.
Regarding the 25% price increase, iQiyi also responded to the earnings call after the release of the third quarterly report. After the price adjustment, there may be a decrease in new users for a period of time, one or two quarters. However, according to the analysis and the experience of other similar companies, this negative impact will soon disappear.
's third-quarter financial report also reflects that online advertising service revenue for the quarter was 1.8 billion yuan (271 million US dollars), a decrease of 11% from the same period in 2019. The decline comes from the reduction of advertisers’ budgets during the epidemic.
's third-quarter content distribution revenue was 392.3 million yuan ($57.8 million), a 42% decrease from the same period in 2019. This is mainly due to the fact that iQiyi released less content on other platforms this quarter. The Mist Theater that has emerged this year, and the hotly debated "Hidden Corner" and "The Silent Truth" are all broadcast exclusively. To some extent, membership service revenue and content distribution revenue have a trade-off relationship. When there are fewer exclusive broadcasts, the membership fee will naturally not increase.
's other income was 979.6 million yuan (US$144.3 million), an increase of 5% over the same period in 2019. This is most likely to be the diversion service of online loans. There is a "Xiaoyadai" on the iQiyi mobile APP interface, which is provided by CITIC Baixin Bank and Xinwang Bank.
At the operational level, iQiyi's losses have narrowed. Amortized net loss per common share of iQiyi was RMB 1.61, while in the same period of 2019, the net loss per common share of iQiyi was 5.04 RMB.
iQiyi had a net loss of 1.2 billion yuan (US$173 million), compared with a net loss of 3.7 billion yuan in the same period in 2019.
This is also the main reason why iQiyi rose 4% after the close of the financial report.
However, the decline in the number of members and the peak penetration rate of paid members (99.5% are paid members) have caused investors to worry about the growth space of the "Chinese version of Netflix". After all, the Internet does not look at net profit, but more at scale.
