iQiyi’s “stable progress”.
Editor’s note: This article is from WeChat public account “Mirror Entertainment” (ID: jingxiangyule), author Liang Jialie, editor Zhang Fengqi. Authorized to publish.
At a time when the Internet dividend is gradually fading, it is not easy for video site members to increase their growth rate after breaking through 100 million.
On November 7, IQI’s Q3 earnings report showed that at the end of the third quarter, the number of Iqiyi subscription members reached 105.8 million, a year-on-year increase of 31%.
In the overall situation of the film industry’s overall downturn in the third quarter, iQiyi Q3’s financial report was higher than market expectations: total revenue reached 7.4 billion yuan, up 7% year-on-year, of which member service income was 3.7 billion yuan. Renminbi; online advertising revenue reached 2.1 billion yuan; content distribution and other revenues were 680.4 million yuan and 932.3 million yuan respectively. In addition, iQiyi’s content cost growth rate continues to decline in Q3.
Affected by the financial report, iQiyi’s share price rose nearly 9% after the market, hitting 19.03 US dollars and the market value reached 14 billion US dollars.
This stock price increase is in fact closely related to the announcement of the strategic cooperation between iQiyi and Malaysia’s first media brand Astro on November 6.
Cooperating with Astro, representing the further expansion and deepening of iQiyi’s overseas layout, providing more outlets for the multi-quality content created by the platform, while the expansion of overseas markets may also bring the next high outbreak for platform paying members. growth point.
Local: Re-expanding with stability and stability
After careful analysis, the iQI Q3 financial report has a lot of data, which is closely related to the platform’s long-term deep cultivation of high-quality content and the construction of a diversified business ecosystem:
1. Total revenue increased by 7% year-on-year
In the third quarter, the film and television industry environment is still relatively sluggish. This can be seen from the earnings reports of major film and television companies in Q3. Even though most film and television companies have made profits from the losses in the first half of the year, nearly half of the company’s revenues are year-on-year. The growth rate is still in a negative growth, and the rate of decline in the growth rate has even reached more than 500%.
In contrast, thanks to diversified business layout and diversificationIn the camp measure, iQiyi achieved a total revenue of 7.4 billion yuan and a year-on-year increase of 7% in Q3, higher than the previous market expectations.
After proposing the “Apple Orchard Strategy” in 2018, iQiyi has gradually developed from the video-based “Apple Tree” model to cover diverse entertainments such as drama, variety, literature, animation, children, sports, and artist brokers. The ecological “apple garden”, the construction of the full-link entertainment ecosystem, greatly enhances the platform’s liquidity.
Q3’s financial report shows that iQiyi’s other IP-based business revenues reached 932.3 million yuan, a year-on-year increase of 12%. This is mainly due to the growth of a variety of new games released by Tianxiang Entertainment. Tianxiang Mutual Entertainment is a game R&D and distribution company acquired by iQiyi in 2018. Nowadays, just one year after the completion of the acquisition, the driving force of Tianxiang mutual entertainment to the iQiyi entertainment ecology has begun to appear.
2. Paying members grow steadily after breaking through 100%
As of September 30, 2019, the total number of iQiyi subscription members was 105.8 million, an increase of 31% year-on-year. Q3, iQiyi membership service revenue was 3.7 billion yuan, a year-on-year increase of 30%, accounting for up to 50% of total revenue.
Q3, Iqiyi has been online, “Dear, Devotion”, “Little Joy”, “The Fire Academy”, “My Margin”, “My Mogley Boy”, “The City Without the Lord”, “The World owes me one First love, “I am waiting for you in the future”, “Summer’s Summer”, “China’s New Rap 2019”, “Man with Housework”, “My Family and My Country” and many other high-quality copyrights, self-made content, and the influence of self-made dramas will be further enhanced.
Now, the video website’s headline online drama and online comprehensive production are fully upgraded, and online movies are also being upgraded. The trend of quality is obvious. The continuous growth of platform members is closely related to quality and high-quality homemade content. This summer, the iQiyi homemade variety “Summer of the Band” in the blasting market will bring the rock music that has been silent for a long time, and bring the commercial value of the band to a new high. It is natural to know the driving power of the paid members of the platform.