Can the Dajiao drama go to the sea, can I "save" iQiyi?

Author ｜ Salad sauce

Edit ｜ Miji

This summer, under the blessing of a number of explosive dramas such as "Gangster Master Fall in Love with Me", iQiyi attracted a large number of Southeast Asian users and advertisers. But for three years to go to sea, the relevant business does not seem to bring iQiyi's visible increase to iQiyi.

On the evening of August 30th, Beijing time, iQ.us released unaudited financial data in the second quarter of 2022. In this quarter, iQiyi achieved a total revenue of 6.7 billion yuan (RMB, the same is not marked), of which membership service revenue was 4.3 billion yuan, an increase of 7%year -on -year; advertising revenue was 1.2 billion yuan, a year -on -year decrease of 35%, and content issuance was issued. The income was 479 million yuan, a year -on -year decrease of 30%.

Among them, iQiyi's monthly average monthly single member income (ARM) was 14.53 yuan, an increase of 8%over 13.42 yuan in the same period last year. For the year -on -year increase in membership revenue of this quarter, iQiyi attributed to the improvement of the user experience brought by high -quality content.

As the main source of income for iQiyi, member income has always been the key areas of the industry's attention. At this quarter's financial report, iQiyi said that in addition to the high -quality content produced in China, the "Grand Gang Master Fall in Love with Me" released by iQiyi International Edition in Thailand has also attracted the attention of users and advertisers.

In fact, since the 2019 iQiyi International Edition is launched, iQiyi has been actively exploring the sea, especially in the Southeast Asian market. However, from the overall income of iQiyi, especially the revenue curve of membership business, it seems that going to sea does not seem to drive a significant increase.

In the future, iQiyi will continue to work out of the sea, and can these hot "gangsters" "stir the water" in iQiyi's revenue?

Relying on the "open source" in the sea, the revenue is difficult to increase

Since the corporate strategy is adjusted from increasing income to profit, "throwing" has always been the focus of iQiyi.

In terms of cost, the cost of iQiyi's revenue in this quarter was 5.2 billion yuan, a year -on -year decrease of 24%. Among them, the cost of content cost was 3.9 billion yuan, a year -on -year decrease of 24%. The reduction of content cost benefits from the optimization of content strategies and improvement of operating efficiency. The overall operating cost of the season decreased by 31%year -on -year.

Correspondingly, marketing and R & D expenses also decreased year -on -year. Marketing expenses were 800 million yuan this quarter, a year -on -year decrease of 32%. R & D expenses were 480 million yuan this quarter, a year -on -year decrease of 29%.

In terms of profitability, under the NON-GAAP standard, iQiyi realized operating profit of 344 million yuan in this quarter, and the operating profit margin was 5%. The operating loss of 779 million yuan in the same period last year, the operating loss rate was 10%.

Under effective cost control, iQiyi's net loss narrowed from 1.4 billion yuan in the same period last year to 214 million yuan in this quarter.

However, while the cost is effectively controlled, Iqiyi's various income has not increased significantly.

The overall revenue of iQiyi this quarter was 6.7 billion yuan, a year -on -year decrease of 13%. In addition to the slight increase of 7%to 4.3 billion yuan, the advertising and content distribution business all showed a year -on -year trend.

Regarding the issue of iQiyi's increasing profit, the founder of iQiyi and CEO Gong Yu said at the financial report meeting that reporters asked questions that when we continued to test the bottom line of the cost, when the cost was the most efficient, so The cost and cost have been reasonably controlled.

However, for the income of low member business, Gong Yu said that there are several main reasons: first, the second quarter itself is the off -season of the film and television; second, many theater movies under the impact of the epidemic have been released, which has led to streaming media as the cinema movie movie The downstream distribution platform is also affected. In addition, the consumption willingness will be reduced in the overall economic situation, and it will also affect member income. Third, due to the review, some content has not yet been launched.

Gong Yu showed an optimistic attitude towards the third -quarter membership income. He said that the impact of the epidemic is being eliminated, and everyone's willingness to consume is picked up as a whole, and the summer season is the peak season of theater. Therefore, the above -mentioned negative influencing factors will be alleviated.

However, iQiyi did not stick to "throwing", but also actively explored in the "open source" part.

On July 19, iQiyi reached a cooperation with Douyin, and the two sides reached an agreement on the content of the work of the work. At this meeting, iQiyi discussed the meaning of this cooperation to "open source" of iQiyi -this cooperation will benefit from two points, and one is to use the videos of the Douyin platform Iqiyi drainage; the second is the cash income obtained by iQiyi from Douyin.

Zhang Yuqing, an analyst in the entertainment industry, said that the cooperation with Douyin may bring the dual effects of traffic and income to iQiyi. In the future, iQiyi may be directly embedded in the jump link under Douyin's secondary video. The audience can click to watch the full version of iQiyi's full version of the video, which is equivalent to Douyin with his huge traffic for iQiyi "advertising. "". The Douyin's secondary demand is very high. If you pay through copyright fees and other forms, it will also be a considerable income for iQiyi.

"The difficulty lies in whether iQiyi can retain the users who turn in by curiosity, transform into members and effective traffic, and then attract advertisers through traffic, thereby driving the income of each sector." Zhang Yuqing added supplement Tao, "It's hard to judge now."

In addition to the cooperation with Douyin, iQiyi's active exploration of the business of going out to the sea is also part of the open source.

In June 2019, iQiyi launched an international version, and since then, it has begun to explore the business of going to the sea. In April of this year, iQiyi's self -made drama "Master of the Gangsters Fall in Love with Me" was popular in Southeast Asia. It is reported that the play has scored 9.1 points on IMDB. The two main CPs in the play have repeatedly appeared in Thai media, the United States Instagram, and China Weibo. At the top of the hot search list, the joint magazine was sold out on the line. At present, the crew is still holding a World Tour concert. Represented by the popular "Domineering President" drama, can iQiyi's work of going out to sea really create revenue?

Exit the sea and anchor Southeast Asia

From the beginning of going to sea, iQiyi seemed to be "iron -hearted" to "swallow" the Southeast Asian market.

The senior product manager Beibei told Xiaguang Society that there are two difficulties in the video to go to sea. Different requirements for content generated.

In order to solve these two major difficulties, iQiyi chose enough "localization" strategy of going to the sea.

In terms of content, iQiyi initially went to the sea with other long video platforms such as Tencent. For example, in 2020, the dramas such as "Hidden Corner", "Fourteen Years of Chenghua", and "Beautiful Scholars" produced by iQiyi have been released for Malaysia, Thailand, Singapore, Cambodia, Myanmar and other countries and regions.

However, whether it is iQiyi's brand influence or the influence of Chinese dramas in Southeast Asia, it is slightly inferior to American and Korean dramas.

According to the "Southeast Asian Online Streaming Market Survey Report" released by the consultant and consulting company Media Partners Asia (MPA) in 2022, the most popular content in the area is Korean drama (30%), American drama (23%) and Chinese dramas (14) (14) %). The international video streaming platforms such as YouTube and Nafei are the first choice for users. Therefore, if it is simply limited to the release of national dramas, it is difficult for iQiyi to open the overseas market.

As a result, iQiyi began the "localization" steering at the content level.

First of all, focus on Chinese copyright works that landed overseas. Yang Xianghua, a senior vice president of iQiyi, said that in Chinese content, young people -based episodes are very popular overseas. Overseas users have continued to grow on the amount of viewing and viewing of Chinese dramas and content.

Second, try internationalization overseas content, iQiyi focuses on the two fields of Korean dramas and Riman, such as trying to make self -control in the field of Korean dramas.

Third, localized dramas are launched in Southeast Asia. For example, iQiyi's first Southeast Asian self -made drama "Soul Ferry · Nanyang Legend", which was launched in August 2021, and the original Feliben's original drama "Saying Goodbye" and "Hello, Heart" released in the same year. And the explosive Thai drama "Master of the Gangs in Love with Me" released in April this year.

While the content is more localized, iQiyi also opened an operational division in Southeast Asia and cooperated with local brands.

In November 2019, iQiyi reached a strategic cooperation with the Malaysian media brand Astro. Based on the global operation of its international entertainment service (IQIYI APP), it will combine the market environment and user needs in Malaysia in combination with Astro to carry out more matching. Localization operations and marketing activities of local culture. In 2020, iQiyi established local offices in Thailand, Malaysia, the Philippines, Indonesia and other regions.

The content is fully localized, and the business cooperates with local brands. Iqiyi's strategy of going to the sea seems impeccable, but the data has not been supported.

According to iQiyi's financial report data, in 2019, the iQiyi member business achieved 14.4 billion yuan in revenue, and this data increased by 14.58%year -on -year in 2020 to 16.5 billion yuan. Obviously, the deployment and content expenditure of iQiyi's "big sword" in 2020 obtained positive feedback from member income.

However, the good times did not last long. By 2021, the iQiyi member business achieved 16.7 billion yuan in revenue, a slight increase of 1.21%from the previous year.

"This shows that the loyalty of the user is for the drama, not for the platform." Babe said.

Many American drama audiences have relatively "loyalty" on the platform. For example, the tendency of "heavy taste" content to choose HBO and emotional dramas is to see CW, and the positioning of the two streaming giants, Disney and Naiti, is also very clear. Therefore, the platform itself anchor some user orientation.

But domestic video platform does not seem to be so clear. "If you pay attention to the" Ai You Teng "financial report, you will find that the data results have changed significantly in that season and the quarter of the season without any good dramas. The audience followed the drama. Excellent content production, bad aspects will make the platform more passive. "

Even if the huge income brought by "going to the sea" in the short term, most analysts are still optimistic about iQiyi's business.

Guoguo Guoguo, a senior entertainment industry, said that choosing to go to Southeast Asia in the sea is more related to local production costs. "Compared with the production cost of domestic dramas, overseas production teams and customized dramas are more price advantage. For example, Thailand, even if the top -level female artist, the film pay is 200,000 yuan/episode. The cost of making is not a level. "Beibei said that after the success of" Master of the Gangs ", maybe iQiyi may be deeply cultivated in the segment of" Yanmei+Local Production ". "If you can highlight the positioning of the platform through continuous excellent works, it will greatly increase user stickiness, thereby attracting more advertisers, and changing advertisers and users only chase the drama and do not follow the platform."

Streaming member system, is it in the end?

Whether it is the cooperation with Douyin or the exploration of the business of going out to the sea, the ultimate purpose is to transform traffic into paid users, so as to serve iQiyi's most important business sector -member services.

However, since the first quarter of 2021, iQiyi's membership income has not performed well. In the previous quarter, from 4.3 billion yuan in the first quarter of 2021, to 4.3 billion yuan in this quarter, iQiyi's membership revenue has almost increased; and year -on -year, in the past six quarters, membership revenue in the past six quarters The increase is only 8%.

Not only iQiyi, but also the membership income of streaming giants Nafei also performs poorly. In the second quarter of the 2022 financial report, even with the blessing of the explosive drama "Wonderful Story", Nai Fei still faces the loss of 970,000 members from the previous month.

Members of other domestic video giants have also grown weakly. Taking Tencent Video as an example, in the second quarter of 2020, Tencent Video paid members were 114 million, an increase of 18%year -on -year from the previous year; in the second quarter of 2021, Tencent Video paid members increased by 9%year -on -year to 125 million; In this quarter, Tencent Video's paid members were 122 million, a 2.4%decrease from the same period last year.

Regarding whether the membership system of the video platform has entered the cold winter, Chen Jia, an Institute of Independence International Strategy, said that the membership model of overseas and domestic members needs to be discussed separately. Taking Nafei as an example, a series of reforms have been made after a high growth, including membership fees adjustment, content adjustment, advertising adjustment, etc., but it seems that it has not yet reached expectations.

Chen Jia said that many people think that the US member video platform represented by Naifei has begun to decline, but it is actually just a callback of Naiti's stock price. The membership system of the American video market has developed very mature. Even if Nai Fei has a decline day, most of the latecomers will continue to use the member system of membership.

For the domestic market, long videos and membership systems face more severe challenges. Aside from the environmental factors of epidemic interference, the development of domestic long video platforms also has its limitations. For example, the model is too single. In the early stage, we concentratedly imitated the overseas IP for localization and adapted, and the lack of innovation in the middle and late stages. In the environment where the review tendency is stricter, whether it is self -made or localized overseas IP, there are some "hands and feet."

In terms of member system, "whether Chinese audiences watch genuine videos as members are still a choice question. Even for members who choose genuine videos, facing programs that are the same, lack of explosive points and unsightly places, Choosing the core entertainment point of long videos in the form of short videos is still the most economical choice. "

Regarding the development of the future membership model, Beibei said that the broad region of the Chinese market may have no new content and membership model on the first and second -tier market long video platforms, but there is still much room for penetration in the sinking market. "I think the main theme dramas such as" Shanhai Love "and" Dajiang Dahe 2 "launched by iQiyi in recent years are also to further open up the sinking market."

Through cooperation with short video platforms, exploring the "three -pronged approach" of the sea and sinking market, iQiyi's member business is still worth looking forward to.

*Babe and Guoguo are pseudonym in the text.

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