iQiyi, Chinese Video Streamer, Profits Halved in Third Quarter
Chinese video streaming group iQiyi incurred setbacks in subscriptions and advertising, but was able to improve its content sales, leading to a July to September quarter that was down in revenue and profit terms.
Total revenues were RMB7.2 billion ($1.0 billion), a decrease of 10% year over year in the third quarter of iQiyi’s current financial year. Net income attributable to iQiyi was RMB229 million ($32.7 million), compared to RMB476 million in the same period in 2023.
The company no longer discloses subscriber numbers, only subscriber revenues. It said that membership services revenue was RMB4.4 billion ($622 million), decreasing 13% year over year, primarily due to a lighter content slate.
Online advertising services revenue was RMB1.3 billion ($191 million), decreasing 20% year over year, primarily due to the decrease in brand advertising business, partially offset by the growth of performance-based advertising business.
Content distribution revenue was RMB814 million ($116 million), increasing 52% year over year, primarily driven by the increase in the barter transactions. Other revenues were RMB729 million ($104 million), decreasing 8% year over year.
Content costs as a component of cost of revenues were RMB4.0 billion ($569 million), decreasing 5% year over year. “The decrease in content cost was primarily due to lighter movie offerings in the quarter,” the company said.
“In the third quarter of 2024, we topped the industry in the drama series market share, according to Enlightent data,” said Gong Yu, CEO of iQiyi. “We have recently elevated our entertainment offerings and services with strategic enhancements, integrating sought-after mini and short dramas to complement our extensive long-form content portfolio. We have also introduced a family account option within our membership programs. We believe these improvements will better serve users’ evolving entertainment needs.”
“Our goal is to enhance content appeal by optimizing long-form video offerings and incorporating mini and short dramas into our content portfolio. With disciplined execution, we believe that such initiatives will lead to long-term value creation for our businesses,” said Wang Jun, chief financial officer.
The company has shares traded in ADR form on the NASDAQ in the U.S. These reached $5.79 apiece in July, but in recent months the price has hovered close to all-time lows. At $2.02 per ADR, the company has a market capitalization of $1.06 billion.
