Works of Tiger Sniffing Mobile Information Group

Author | Hu Zhanjia

Title map | Visual China

Today, iQiyi is over ten years old, but it obviously has no mood for a birthday.

Half a month ago, short-selling agency Wolfpack published a short report called “The Netflix of China? Good Luckin” to hit iQiyi for years of losses.

IQIYI was questioned in turn by receiving DAU from the camp to the number of users. This small giant, who is backed by Baidu, bears the name of “Chinese version of Netflix” and holds a good brand, landed in March 2018. After the US Nasdaq, it did not usher in a highlight moment.

Constantly increasing the cost of content, the impact of short video, and the unfavourable test of new business …. In the long video war, iQiyi, which burned money to break through, not only did not make great progress, but also suffered year-on-year losses Constantly consuming the patience of the capital market.

The loss is over 10 billion, what happened to iQiyi

According to iQiyi ’s fourth quarter financial report for fiscal year 2019, iQiyi ’s revenue for the 2019 fiscal year was 29 billion yuan, a year-on-year increase of 16%, but there was a huge net loss of 10.3 billion yuan in the back of the revenue . This is an increase of 13.4% compared to 9.1 billion in 2018. Among them, the net loss in the fourth quarter was 2.5 billion yuan, a net loss of 3.5 billion yuan over the same period last year.

In contrast, the other three big video companies are competing for (Tencent Video, Youku Video) , a loss figure The two add up to each other. Tencent’s 2019 financial report shows that the annual operating loss of the video business has been reduced to less than RMB 3 billion. Alibaba ’s third-quarter financial report for fiscal year 2020 also stated that the adjusted EBITA loss of Alibaba Entertainment, including Youku and Alibaba Pictures, was 3.298 billion yuan, a 45% decrease from the same period last year.

But why has iQiyi’s fiscal deficit gradually increased? What I have to say here is the high content cost of iQiyi.

Iqiyi has created its own unique moat through the route of purchasing copyright + homemade content, which is also an important factor for iqiyi members to flock to the platform.


The financial report shows that in the fourth quarter of 2019, iQiyi ’s membership service revenue was RMB 3.9 billion (approximately US $ 554.6 million), an increase of 21% over the same period of the previous year. The annual membership service revenue was 14.4 billion yuan. In June 2019, iQiyi announced that its paying members had exceeded 100 million. This has become a major revenue growth point for iQiyi beyond advertising.

The house leak is in the midst of rain. In recent years, in the advertising business, with the downturn of the entire advertising market, iQiyi ’s advertising revenue has not become a life-saving straw to make up for the loss gap. According to financial report data, from 2018 From Q2 to Q4 in 2019, iQiyi’s advertising revenue increased by 45%, -4%, 9%, 0.4%, -15.9%, -13.7%, and -14.5% year-on-year, which was extremely unstable and in a state of decline.

On the one hand, it is a constantly tightening revenue source, on the other hand, it is a huge investment in content costs. With a big investment in content, domestic video sites, except for LeTV, which has become a past tense, have almost nothing to do with it. IQiyi rivals.

According to public financial report data, from 2015 to 2018, the cost of iQiyi content was 3.69 billion, 7.54 billion, 12.62 billion and 21.1 billion, respectively. In three years, revenue increased by 370% and content cost increased by 471%. In 2019, iQiyi’s operating cost was 30.3 billion yuan, of which the content cost was 22.2 billion yuan, an increase of 1.1 billion yuan from 2018’s 21.1 billion yuan. This also means that iQiyi spent 22.2 billion yuan on copyright and self-made content.

Basically the rhythm of earning 9 and 10.

In the short report, a former iQiyi employee engaged in content acquisition claimed that the non-exclusive license is worth 1,000-5,000 yuan per episode. For popular shows, the maximum is 20,000 yuan per episode. In order to buy the broadcasting rights of film and television works such as “Hunter” and “If you can look back”, the price of the Internet broadcasting rights obtained by iQiyi is 458 million yuan, while the broadcasting rights of Shanghai Wenguang TV are only 180 million Yuan, the price paid by iQiyi is a whopping 278 million yuan.

The rising cost of content has become the growth shackle of iQiyi. During the development process, iQiyi is also constantly expanding on the business boundary. There are only a handful of footholds.

New business can not reverse the huge loss situation

The expansion of iQiyi’s business boundary has a long history. During the prosperity of live broadcasting, iQiyi also launched the live streaming product Qixiu in 2016, but it has basically not achieved results.

With the fire of short video platforms such as Douyin and Kuaishou, iQiyi has also been testing water in this area. IQIYI has launched short video products such as gingerbread, whale-eating, natto, etc., which did not attract enough attention.

At the end of 2019, iQiyi shot again in the field of short video, and the short video of the young trend “Hang chant” was quietly launched. On the day of the launch, the author also used the product, and the screen of “Both you and everyone looked good” opened. The language directly explains the function of the product, and the video can be converted horizontally and vertically by flipping the screen. At the time, there were very few unofficial numbers that the platform settled in. The video content that can be rotated is mixed with the non-rotatable mixed. .

Hang 呗 product page

While developing an independent app, iQiyi did not give up its vertical screen attempt.

In October 2019, Gong Yu said at the iQiyi Autumn Pleasure Conference, “Vertical content will become a mainstream direction in the future, and the change from grass-rooted content to professional content will be trend”.

Afterwards, the vertical screen short drama “Life Starts with Me” starring the hot eyes Yoko and produced by the spring breeze picture was launched on iQiyi. However, in terms of content viewing experience and immersion, some netizens said that it is difficult to achieve a movie sense of 16: 9 or 2.35: 1 artistically or technically in the short term for content created under a mobile phone vertical screen container. And this is more an attempt from the level of capital or advertisers.

In addition to the horizontal and vertical expansion of the content field, at the commercial level, iQiyi is not limited to the advertising + membership model.

In 2017, iQIYI also began to get involved in finance, hoping to create an “entertainment + consumption” integrated financial experience. In June 2018, iQIYI and Baixin Bank launched the “changes plus” function to provide users with Current interest, iQiyi VIP membership rights and other services, because of the user tonality and iQiyi entertainment attributes, iQiyi’s traffic has not really transformed into financial products users.

At the end of 2019, iQiyi cooperated with CITIC Baixin Bank, Xinwang Bank and other financial institutions to launch the credit service platform “Xiaoyadai”. According to the official introduction, “Xiaoyadai” as a credit service platform is responsible for providing Big data and technical support provide users with Internet financial information and channel diversion for financial institutions.

However, the compliance of the cash loan business and the tightening of supervision at the policy level have prevented iQiyi from realizing the effective conversion of traffic.

Entering 2020, iQiyi is also testing water in the e-commerce field, launching a trendy makeup independent content e-commerce platform, focusing on young people ’s trendy makeup, and gathering KOL to create a content community similar to Xiaohongshu At present, more than 50 brands have settled in the mall, and the band is realized through the program IP.

It can be said that iQiyi has spared no effort in trying new business, but from the current point of view, it has not been foundIn addition to advertising and membership, it can really make it a foundation.

The next growth pole: to become “Youtube” in China?

In the financial conference call on February 28, Gong Yu said that the company is developing and testing an app similar to YouTube, called “Fan Mo”.

Gong Yu said that “any moment” mainly produces two kinds of content, one is MCN or personally produced PUGC content, you can use advertising fees Account sharing and user payment methods cover content costs; the second is to distribute iQiyi’s long video content on “anytime” to amortize part of iQiyi’s content costs and gain more monetization capabilities.

On April 2, the “Aiqiyi Edition” app was officially launched.

In Gong Yu ’s blueprint for imagination, all the delays of the Chinese version of Youtube did not appear, due to multiple factors such as technical application level and culture. At present, with the advent of 5G, he believes that the time has come. “The rise of the 3G era is the microblog of graphics and text. The rise of the 4G era is the small video of the vibrato. In the 5G era, short videos of medium duration will be popular Come on. “

However, in the medium-length short video field, both Douyin and Kuaishou have been deployed. In March 2019, Douyin opened 5 minutes long video permission for knowledge content creators, Kuaishou was also opened to some users. Permission to upload 10 minutes of video content.

It can be said that Gong Yu’s judgment is already new.

In addition, the two-dimensional community B has been cultivating in this field, and the B station has also been called the “most like Chinese version of YouTube” platform by the media and users. At this time, iQIYI ’s entry is medium. The video didn’t get up early, but it hurried to the late episode.

Since its establishment, iQiyi has always advertised itself as the Chinese version of Netflix, but from the current point of view, this dream can basically be broken. Netflix, which is already a streaming media giant, has already explored a mature and benign business model, and the number of members has long been beyond the reach of iQiyi. Youtube “story.

How long this story can be told is still unknown.