After more than a year, iQIYI once again announced a membership price increase.
On December 15, according to the official news of iQIYI VIP members, iQIYI will update the subscription price of gold VIP members from 0:00 on December 16, it is reported that the continuous monthly subscription is raised from 19 yuan to 22 yuan, the continuous season card is raised from 58 yuan to 63 yuan, the ordinary monthly card is raised from 25 yuan to 30 yuan, the ordinary season card is raised from 68 yuan to 78 yuan, and the annual pass membership fee is unchanged. At the same time, users who have previously purchased and have not yet cancelled the aforementioned consecutive monthly/quarterly/annual subscription services are provided with one year to maintain the original service.
iQIYI also said that the current video platform membership subscription price is low, this phenomenon has affected the healthy development of the entire industry, in order to establish a more benign industrial ecology, so that excellent content producers have returns, and ultimately provide members with more and better content, so we decided to adjust the price of members.
As soon as the news came out, Weibo netizens expressed that it was difficult to accept, believing that the current iQiyi membership price was not low, and if the price was still raised, it would be replaced by other video platforms. Some netizens also said that the current iQIYI content industry depth is not enough, and the whole network video resources are too scattered, even if you buy a single platform of members, there are not enough resources, go to other platforms to watch videos or buy members, the cost is not only iQIYI members.
To put it simply, users think that the current iQIYI video content is sorry for the price, while iQIYI believes that the price increase is the result of comprehensive consideration, after all, iQIYI has been losing money for ten consecutive years. Although this situation has improved in the past two years, there is still a big gap from profitability.
This is iQIYI's first increase in membership fees after its first price increase in November last year. It is also a big move by iQiyi after the recent layoffs.
In 2021, iQIYI's "cold winter"
In January 2019, iQIYI instantly exploded on the Internet with the "Youth with You" talent show, countless users became iQIYI members, and brands spent a lot of money to become the sponsor of "Youth with You" in order to obtain higher traffic and exposure.
According to iResearch statistics, the average single-device viewing market of such talent shows is 12.2% higher than that of new variety shows, the user stickiness is stronger, and the average performance of the overall program value is 1.3 times the industry average. Business value and liquidity are also more outstanding in the n generation. According to iResearch statistics, such programs can attract an average of 6.4 brand implants, which can be described as both wealth and traffic.
However, with the entry of Tencent, Youku, Mango and other platforms, iQiyi's advantages are no longer obvious, the reason is simple, other platforms launched variety shows have better broadcasts, more viewers, and brands will naturally tilt their resources to new programs.
If the emergence of competitors has not yet had much impact on iQIYI, then a statement published by the People's Daily on May 5, 2021, completely hurt iQIYI's vitality. Xinhua News Agency said that iQiyi's operation of a certain variety show (if you want to vote, you must buy a certain milk, and there are voting resources printed on the bottle cap) has led many fans to buy drinks, as long as the bottle cap, milk is directly poured into the sewer. In this era of national advocacy for food conservation, the rapid fermentation of this event has pushed iQiyi to the forefront.
What's more, in September of the same year, the State Administration of Radio, Film and Television officially issued a notice to clearly prohibit the broadcast of idol cultivation programs. This means that the good days of video sites using this to generate traffic and revenue are over.
In addition, iQiyi's old bank has also suffered a heavy blow in the past two years, since a website invented the "advanced on demand" (that is, members need to recharge additionally to watch a few more episodes of TV series in advance), other video platforms have also followed suit. However, such practices will eventually cause resentment in society and consumers, and many media such as the China Consumer Association have publicly stated: "The so-called video platform services should be compliant according to law and less routine." ”
Under the pressure of public opinion, iQIYI had to cancel the advanced on-demand function in October this year, and on the night of this function cancellation, iQIYI's US stock fell by nearly 5%. In short, iQiyi's 2021 can only be described by the word "uncomfortable".
After the price increase, can you save yourself?
As of press time, iQiyi's stock price was $4.69 per share, which was about 80% of the market value compared to the price of $28.91 per share at the beginning of the year. In addition, according to iQiyi's own relevant financial reports, it has lost nearly 40.2 billion yuan since 2015. iQiyi has never been profitable in its 11 years, and considering the increasing cost. So can iQiyi's membership price increase play a self-help role?
With the continuous decline in the quality of iQIYI's content, the number of members is also in a state of decline, according to the official data released, in June 2019, iQIYI's membership exceeded 100 million for the first time, but this number has not changed for two years. Although iQiyi's market share is still leading, it is not in a completely suppressed position in the Aiyouteng Three Super, and the differentiation strategy of Mango and B Station is full of momentum, iQiyi can not make money for a long time, and the situation of burning money to take the lead will be difficult to sustain.
The ceiling of user growth means that iQIYI carries more uncertainty in the expectation of traffic value, and faces the possibility of shifting from incremental to stock. At this stage, it is necessary to keep the stock from being lost, and it is even more necessary to develop the stock to realize it. In this context, it is not surprising that iQIYI will choose to increase the price of members.
The current membership price increase seems to be the most direct way for iQiyi to increase its revenue source, and the price increase does not mean that there will be no consequences. The most direct is that member users will lose due to the increase in membership fees, but this aspect is already within the scope of iQIYI's consideration. iQiyi's benchmark - Netflix began to increase prices for the first time in 2011, and the number of paid users in that year declined, but the revenue profit is growing rapidly, indicating that iQIYI has accepted the preparation of losing some users to increase operating profits.
However, the reason why Netflix can maintain a rapid rise in performance after increasing the price of members is mainly because it can output high-quality content for a long time, such as this year's explosive "Squid Game" and "League of Legends Twin Cities Battle" and attracted many passers-by to become members of its platform. On the other hand, the current iQIYI, once proud of the quality of TV series and variety shows continues to decline, explosive content is more with one hand can be counted, of course, this is also related to iQIYI's losses, in the case of insufficient funds to invest in programs / TV series is obviously unrealistic.
But from the user's point of view, do not think so, the platform does not look expensive, but in fact, this member can not meet their needs, that is to say, if the user wants to get all the content they want, it means to open a membership on each platform. And in the eyes of video platforms, users seem to think that their content is enough to satisfy users to only pay for their individual platforms.
To put it simply, iQIYI members can increase prices, but the premise is that there must be high-quality exclusive content, otherwise it is not a cost-effective deal for iQIYI VIPs.
The cost of watching movies has risen, and it seems to have become a market law
With the increase in the price of iQiyi, it has also correspondingly increased the cost of watching movies for consumers as members. In contrast, when there is no absolute gap between video sites, it is natural to choose a lower cost video site platform. Nowadays, with the popularity of short video applications, the classic clips or complete content of many popular film and television dramas can also be watched on the short video platform. This undoubtedly reduces the cost of consumer access to film and television content.
Therefore, for iQIYI, unless it can continue to produce exclusive explosive content alone, or major video websites have raised their prices to follow iQIYI, iQIYI's price increase may lose a large number of paid members.
If it is only to increase prices to obtain space for development, it means that iQIYI's living space and business model have reached a turning crossroads. iQiyi, you have to make a choice.
However, for now, it is difficult for iQiyi to reproduce Netflix's achievements, after all, Xiao Lei believes that the main motivation for users to pay is because there is good solo head content, most of which comes from original and self-made content.
In summary, iQiyi is now in a rather awkward and dangerous position. Not only has it been in a loss yesterday, but also hopes to make a profit as soon as possible and make up for loopholes, but the main source of income advertising and paid members have fallen into the strange circle of business conflicts, and the only way to solve this strange circle " content" has also suffered more and more challenges.
Obviously, as the only independent listed company among the three giants of long video, iQiyi's life is not good. Not only Tencent Video and Youku are around to catch up, but also have short platforms such as B Station, Kuaishou, and Douyin struggling to catch up, which can be said to be an unsolved internal worry and an external problem. In this case, the stock price plummeted, and it is understandable that the large layoffs were made to gain a longer viability. As for how iQIYI will develop after that, whether the membership price increase can return to the peak, everything has not yet been answered.