iQiyi in a desperate situation struggled to save itself.
From 00:00 on the 16th, iQIYI Gold VIP members will have monthly and quarterly pricing adjustments ranging from 9% to 20%. Gold VIP consecutive annual or regular annual memberships maintain the original price:
Gold VIP member season card, with package: the original price of 58 yuan, after the price increase of 63 yuan;
Gold VIP member season card, single time: the original price of 68 yuan, after the price increase of 78 yuan;
Gold VIP member monthly card, included: the original price of 19 yuan, after the price increase of 22 yuan;
Gold VIP member monthly card, single time: the original price of 25 yuan, after the price increase of 30 yuan;
This is iQiyi's second price increase in more than a year. In this regard, they said, "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 returns, and ultimately provide members with more and better content, we decided to adjust the price of members. ”
Since 2018, user subscription fees have become iQIYI's most important source of revenue. In the third quarter of this year, iQIYI's revenue was 7.589 billion yuan, and membership service revenue accounted for 4.288 billion yuan. Regardless of the absolute value or proportion of membership income, it is increasing.
The number of people willing to pay is not growing. Even in the third quarter, there were 2.6 million fewer people than the previous quarter. According to the data disclosed by iQiyi in the financial report, there were 103.6 million paid members at the end of the third quarter of this year, which was lower than that of the same period last year and from the previous quarter.
If these membership revenues are spread across all subscribers, it is equivalent to contributing 13.8 yuan per person per month to iQIYI. By comparison, each Netflix paid member contributes $14.70 per month in per capita revenue.
Considering the per capita income gap between China and the United States, iQiyi's membership fee pricing is not low. However, counting other costs and expenses that are comparable to or even far beyond the international level, iQiyi is making huge losses every quarter, and the cash flow pressure is huge. In contrast, Netflix's content costs far more than its peers, but it converts those costs into capital that can be charged globally to make a profit.
According to wind-aggregated data, iQIYI's cash flow from operating activities has been negative since the fourth quarter of 2019. Their pre-tax losses were narrowed by the home prevention policy in the first half of 2020, but they have since expanded. In the third quarter of this year, iQIYI's net outflow from operating activities was 2.081 billion yuan and its pre-tax loss was 1.698 billion yuan.
Not long ago, iQiyi laid off at least 20% of its employees, including "Mist Theater", one of its core teams for self-made content.
IQIYI may not have a better way to do anything better than layoffs and raise prices — although it's hard to help the company much — at the end of September, iQIYI had a total of 10.9 billion yuan in cash and short-term investments on its books, deducting 4.647 billion yuan and 4.88 billion yuan of convertible bonds to be repaid in a year, and about 1.5 billion yuan on the books. (Gao Honghao, Gong Fangyi)