Text/Yiting Chen
Edit/Anna
On December 15, iQIYI's official Weibo announced that it will adjust the subscription price of iQIYI Gold VIP members from 00:00 on the 16th: the price of the package will not change, and the monthly and seasonal cards will increase between 9% and 20%. Among them, the price of ordinary monthly cards rose the most, from 25 yuan to 30 yuan; the price of the package rose from 19 yuan to 22 yuan, exceeding the 20 yuan of Tencent VIP.
This time, iQIYI members really want to rank among the top 1 video membership fees.
iQiyi responded: "The subscription price of the video platform has been low, and this phenomenon has affected the healthy development of the industry. In order to establish a more benign industrial ecology, let excellent content producers have a return, and ultimately provide members with more and better content, we decided to adjust the price of members. ”
Judging from the price adjustment range, the increase is not too high. For consumers, the price of a bag of potato chips has probably increased. If you calculate an account for iQIYI, at the end of the third quarter, the scale of iQIYI's subscription membership reached 103.6 million, and the ordinary monthly fee increased by 5 yuan, which in the most ideal state will increase its revenue by 518 million yuan in one month, and 1.554 billion yuan in three months. In the third quarter, iQiyi lost 1.7 billion yuan, and this wave of price increases can make it return 91%.
But the reality is not optimistic, the number of iQiyi members is falling. iQIYI's membership was 106.2 million at the end of the second quarter of this year, but it fell to 103.6 million in the third quarter. There are many reasons, such as the low quality of the content, such as the ugly appearance of over-order eating.
When iQiyi raised prices last year, most viewers expressed understanding, after all, the high-quality content introduced was not cheap. This year, the membership fee has risen, the price has exceeded that of Tencent, which has the most film and television copyrights, and the platform content is declining from quantity to quality, I am afraid that there are not too many people who buy it.
There is no increase in the membership markup
Membership price increases are not limited to iQIYI.
On April 10 this year, Tencent Video raised the VIP price, and the new price system will be adjusted to 20 yuan per month, 58 yuan for the season, 218 yuan for the annual package, 30 yuan for the non-continuous VIP monthly card, 68 yuan for the season card, and 253 yuan for the annual pass. The price increase is about 27%, similar to iQIYI's price increase last year; the reason for the price increase is also consistent with iQIYI, which believes that the domestic membership fee is low.
The long video has always said that the domestic membership fee is low, and the benchmark is the overseas streaming media Netflix. At present, the monthly fee for Netflix basic members is 8.99 US dollars, which is about 57 yuan. Netflix members have risen for 6 consecutive years, but they are very confident. This year's Squid Game is a global hit, with a production cost of $21.4 million, but it created a valuation of $900 million for Netflix.
In contrast, the content quality of domestic video websites is worthy of membership fees? Quality aside, the content cost paid is indeed worthy, or even insufficient.
Sun Zhonghuai, CEO of Penguin Film and Television, said at the time of member price increases that the content cost invested by Tencent Video in the past three years has exceeded 50 billion yuan, and it will still invest more than 100 billion yuan in the next three years.
iQIYI is connected to the disease, and this year's Q3 financial report shows that iQIYI's revenue is 7.6 billion yuan, and the content cost has eaten 5.3 billion yuan. From 2015 to 2020, iQIYI's annual content costs accounted for about 70% of its revenue, and its losses climbed year by year.
The high content cost has not brought iQIYI quality content, which is the biggest reason why it can't retain members.
This year, iQiyi mainly promoted nearly 50 TV series, and only the "Son-in-law" at the beginning of the year achieved good results. "Little Shed", which has high hopes, has become the worst-rated one in the series of "Little Farewell" and "Little Joy"; the most anticipated double-heroine drama "Flowing Golden Years" has been dragged down by the plot of dog blood; and the "Housewife" co-produced with Entertainment Film and Television, because of the cat abuse incident, the Douban score fell to 2.1, which is worse than the 2.4 points of "Dream Showbiz".
Now the general street of online dramas, whether cloaked in the skin of e-sports dramas, legal dramas, or medical dramas, the human setting is never three-dimensional, and the main line is always love. Even if the platform spends a lot of money to invite traffic stars and do promotion marketing, as long as the quality of the content of the play is not good, the audience will not buy it.
Tencent's recently promoted "Liangchen Freehand", the selling point is Luo Yunxi Cheng Xiao's high-value honey love, broadcast 22 episodes, Douban has not yet been rated. At the same time, "Love Is Delicious" unexpectedly exploded, jumping out of the traditional brainless love script, and the Douban score was as high as 8.4, attracting a large number of tap members for Tencent.
The pain point of the long video website is that one or two TV series on the platform are on fire, and this time period will attract a lot of viewers, but after the show is completed, the next traffic password does not know where, and the audience will not always charge members for low-quality content.
After the outbreak of the epidemic, there was a serious shortage of content supply for iQiyi. CEO Gong Yu said that the current number of movies online is not as good as half of the same period in 2019; the proportion of traditional TV dramas is even smaller, probably only about 1/3 of previous years; online dramas have also been delayed due to the epidemic, review and other reasons, even if they are online, the quality has also been discounted.
Under the content dilemma, it is difficult for iQIYI to produce a divine work like "Squid Game" to attract members, and the slight increase in membership fees will only damage iQIYI's few audiences.
Make a fuss about membership fees
For current video sites, the first source of revenue is membership fees, and the second income is advertising.
According to the financial report, iQIYI's total revenue in the third quarter reached 7.6 billion yuan. Among them, the revenue of membership services was 4.3 billion yuan, the revenue of online advertising services reached 1.7 billion yuan, and the revenue of other revenues was 1 billion yuan.
Guotai Junan Research Report shows that after the paid members of the head minister video platform exceeded 100 million people, the growth rate has slowed down, while the growth rate of its membership payment rate has also slowed down after reaching 20% to 25%. iQIYI's membership growth has stagnated this year, with the number of members even falling from 106.2 million in the second quarter to 103.6 million in the third quarter. In this case, increasing the ARPU value of paid members (average revenue per user) will be the trend of the times.
Because of this, major websites invariably focus on members.
The most criticized advanced on-demand this year is the hard-to-give up heart of video websites. Under the premise of existing members, and then at the price of 3 yuan a episode ahead of the demand, you can watch the whole drama at one time. iQIYI CEO Gong Yu once revealed that advanced on-demand can improve copyright losses by at least 30%.
But this mechanism will make the TV series flow out in advance, and the online piracy will continue to be continuous, and it can be watched without spending money. As a result, advanced on-demand was boycotted by members. Since there is advanced on-demand, what do you want members to do? In October this year, under the pressure of members, iQIYI canceled the advanced voD.
In addition, members continue to subscribe three days in advance of automatic renewal, Apple users buy membership is more expensive, but also a common disease of video sites, Aiyouteng, B station, Mango TV have been named and criticized by the Consumer Protection Commission.
And iQiyi's urgent increase in membership fees may be really desperate. Not long ago, iQIYI was exposed to a large number of layoffs, this year's Q3 financial report released, iQIYI's stock price fell 17%, as of December 15, iQIYI's stock price was 4.690 yuan / share, down about 80% from the highest point of the stock price in 2021.
In the years since its establishment, iQIYI has never achieved profitability. Since 2016, iQiyi has raised about 50 billion yuan in cumulative financing, but the cumulative loss has reached 35.8 billion yuan. According to the third quarter of 2021 financial report, iQiyi's net loss in the third quarter was 1.7 billion yuan, an increase of 41% over the same period last year.
iQiyi has not tried other ways to make money. The most successful draft variety show was completely banned due to the milk pouring incident in May, and none of the short videos, knowledge payment, intelligent large-screen marketing, VR, and online education could go through. Coupled with the squeeze of short videos, the days are getting more and more difficult.
Will the rising 5 yuan membership fee be iQiyi's way out? Obviously, it's not.