Iqiyi finally turned over?

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Since iQiyi first announced its membership price, Tencent Video, Youku, and Mango Super Media have also announced the price increase, and some platforms even increased their prices twice within a year. Behind the price increase in the domestic video platforms, it is exposed that they are currently facing the pressure of performance growth.

This pressure is particularly significant at the moment when the Internet demographic dividend growth is bottomed out. If the platform does not have obvious price and content advantages, it is difficult to attract users, let alone pay them for content. Iqiyi knows this, so since the end of last year, it has begun to take a series of measures to provide users with high -quality content to win the favor of users. It can be seen from the second quarter of 2022 released by iQiyi that Iqiyi's strategy has achieved results.

Make a profit again

According to the financial report, iQiyi achieved revenue of 6.7 billion yuan in the second quarter of 2022; under the NON-GAAP standard, the operating profit was 344 million yuan, the operating profit margin was 5%, the month-on-month increase was 5%. Yuan, the operating loss rate is 10%, from a loss to profit. It is reported that this is the second quarter profit after the first profit of iQiyi in the first quarter of 2022.

IQiyi can achieve operating profitability for two consecutive quarters, on the one hand, it benefits from the high growth of its membership service revenue. According to the financial report, iQiyi achieved a membership service revenue of 4.3 billion yuan in the second quarter of 2022, accounting for 64%of the overall revenue. Last year, the service revenue of the same period last year was 4 billion yuan, an increase of 7%year -on -year. In addition, iQiyi's membership subscription business has become its main source of income for 16 consecutive quarters, and has achieved a year -on -year high growth of four consecutive quarters.

On the other hand, its initiative to reduce various business costs also play a role. According to the financial report, the revenue cost of iQiyi in the second quarter of 2022 was 5.2 billion yuan, a year -on -year decrease of 24%, a decrease of 13%from the previous quarter of the previous quarter; %, A decrease of 11%from the previous quarter of 4.4 billion yuan in the previous quarter; sales, general and management costs were 801 million yuan, a year -on -year decrease of 32%, and the compression cost was very significant.

However, compared with the continuous growth of operating profits, iQiyi's overall revenue is declining. According to the financial report, iQiyi achieved revenue of 6.7 billion yuan in the second quarter of 2022, a year -on -year decrease of 13%. In fact, iQiyi's revenue has declined for two consecutive quarters, including advertising business income, content distribution income, and other income, which have declined to varying degrees. According to the financial report, iQiyi ’s online advertising service revenue in the first half of 2022 was about 1.194 billion yuan, a year -on -year decrease of 35%; content distribution revenue was about 479 million yuan, a year -on -year decrease of 30%; other revenue was about 698 million yuan, a year -on -year decrease of decrease 37%.

From the perspective of the overall financial report, iQiyi's profitability in the second quarter of 2022 did have indeed improved significantly. Among them, membership subscription business as its main source of income, it is expected to continue to grow in the future. In addition, in addition to continuously reducing costs, it also focuses on head content to enhance the attraction of the platform.

Strategic focusing on head content

As a long video content platform, iQiyi has always been very concerned about the content. In the first quarter of "The World", "Heart House", "The Tap of the Hunter" and "The opponent", and other explosive circles, while bringing the growth of membership income to iQiyi, it has also been largely firm. Iqiyi is confident in making head content.

First of all, iQiyi further increased the investment of high -quality head and explosive content, reducing the loss of the content of the street. According to the financial report, iQiyi's first half of the new episode in the first half of 2022, a decrease of 20 compared with the same period last year. Although the episodes have decreased, iQiyi relied on the outstanding performance in the content of "The World", "Honor of the Police", "House of Hearts", "Zhu Qing" and "Breaking the Elite". The effective playback rate has increased by 25%and keeps them maintain the highest member content playback efficiency of the video industry.

This means that high -quality head content can not only drive the double growth of the number and revenue of iQiyi members, but also bring longer core brand value to it. However, it is not easy to continue to produce high -quality head content. This requires the platform to slow down and work more in refined operations.

Secondly, in order to focus on the core long video business, iQiyi actively compressed those low -efficiency businesses. Specifically, iQiyi cut off some employees of non -core departments such as short video, games, research institutes, and literature to adjust the structure of personnel, so as Cost, thereby spend money on the blade.

Generally speaking, iQiyi no longer costs a large amount of cash flow, but tilt various resources to the long video business of the platform's core, focusing on the output of long video head content. From the middle and long term, focusing on head content and improving content production efficiency will help further improve the health of iQiyi's business model and drive the improvement of its overall benefits.

Member subscription to become core growth engine

In terms of specific business structure, iQiyi's membership subscription business continues to be the main source of revenue to lead its overall revenue growth.

On the one hand, the iQiyi platform attracts users to pay for viewing by launching high -quality TV series and variety shows. It is understood that in the second quarter of 2022, iQiyi launched a variety of explosive drama such as "Honor of Police", "Zhu Qing", "Broken Elite" and "Chinese Rap", and launched in the cinema movie market. The "Edge Traveler" with a cumulative box office of over 160 million has become the main contribution of the domestic film box office in the second quarter of 2022. In addition, the first -time online movie such as "No one in the eyes" and "Blind Battle" proves that the Internet platform has become the potential of the first window of film consumption. The attractiveness of high -quality content to user consumption is also directly reflected in the financial report of iQiyi in the second quarter of 2022. According to the financial report, iQiyi ’s monthly living member in the second quarter of 2022 increased by 15%year -on -year; the monthly ARM (average single member income) was 14.53 yuan, an increase of 8%year -on -year. At this point, iQiyi's monthly ARM (average single member income) has achieved 8%or more year -on -year growth in six consecutive quarters. It can be seen that only with high -quality content for users can the platform get the development momentum of re -investment and improve the degree of financial health.

On the other hand, iQiyi raising member fees also helps to further increase membership income. It is reported that iQiyi began to announce the price increase in mid -December last year. Among them, the monthly price increased from 25 yuan to 30 yuan, and the continuous monthly price increased from 19 yuan to 22 yuan, up 15.8%and 20%, respectively. The yuan rose to 78 yuan, and the price of the even bag rose from 58 yuan to 63 yuan, an increase of 8.6%and 14.7%, respectively; the price of ordinary annual cards was temporarily unchanged (248 yuan).

In addition, from the financial report, although iQiyi's membership subscription revenue increased, the total number of daily subscribed members declined and fell below 100 million again. According to the financial report, in the second quarter of 2022, the average daily subscription membership members of iQiyi were 98.3 million, compared with 101.4 billion in the first quarter of 2021 and the first quarter of 2022, all declined. In addition, in the fourth quarter of 2021, the total number of members of iQiyi subscribed to the total number of members fell below 100 million, with a total of 97 million, which shows that iQiyi's membership business is in a kind of non -normal, non -stable, non -sustainable and healthy development. status.

"Strong Content+Strong Channel" becomes a new key

Judging from the overall performance of iQiyi's second quarter financial report, although its revenue is declining, the total number of daily subscription members has also declined slightly, but its overall development is better. However, in order to cope with the impact of membership, iQiyi had to strengthen the control of good content and the progress of strong channels.

In the end, iQiyi will continue to launch high -quality explosive content to promote the double growth of the number of members and income in the future. In the third quarter, iQiyi launched excellent dramas including the Basic Law of Genius and Cang Lan Jue. Among them, "Cang Lan Jue", as the explosion of this summer, has become love. The fourth episode of Qiyi has exceeded 10,000 episodes, and it has strongly reached a number of domestic third -party data platforms in China, and it has risen straight lines in terms of commercial value.

As of now, "Cang Lan Jue" has attracted more than 20 brands such as Yili, Sanjiu, Ta at Bell, Estee Lauder, Jiabei Eit, Xuanma Food, Pulse, Vitality Forest, to achieve the three parties of the content, platform, and brands. win. The unprecedented popularity and extraordinary business value of "Cang Lan Jue" once again confirmed the value of long video content for brand marketing. The ability to stabilize the explosive models of the stable output of iQiyi has enabled it to double growth in the number of members and income in the future, maintaining a positive and optimistic attitude.

Secondly, iQiyi reached cooperation with important partners such as Douyin and Taimeng Investment Group in the third quarter to promote mutual benefit cooperation and achieve win -win development. Among them, iQiyi and Douyin reached content authorization cooperation, that is, iQiyi authorized the long video content of his own platform to Douyin. The creators in the Douyin Ecosystem can make secondary creations to produce more and more more and more more and more more and more more and more more and more more and more more and more more and more. Value video.

This cooperation can not only retain users and members for iQiyi, but also make its long -term value more monetized space. Specifically, this cooperation through the main way of "short -term" content of short video content, so that Iqiyi's potential users have more ways to obtain iQiyi content and information, so as to promote them to the iQiyi platform Come, pay for the video content. It is reported that the cooperation between the two sides in terms of product and content has gradually implemented from the third quarter.

Generally speaking, inside the platform, iQiyi achieves profit growth with the strong momentum of its series of explosive content; and outside the platform, through the cooperation with Douyin and Taimeng Investment Group, it has established a win -win situation. The model promotes the healthy and stable development of the entire ecosystem including media platforms, users, partners, etc. Although the effective geometry of these measures is not yet certain, these attempts are undoubtedly a small number of preferential options for the current iQiyi.

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