On May 16, iQiyi released its first quarter 2023 results announcement。Financial data show that the company's total revenue during the period hit a quarterly high of 8.3 billion yuan (RMB, the same below), up 15% year-on-year, back to double-digit growth;.18.1 billion yuan, net profit for the same period last year was 1.69.1 billion yuan, up more than 2.65 times; the total number of daily subscription members in the first quarter was 1.28.9 billion, a net increase of 17.3 million from the previous month.。

The core business is gratifying! Membership services, daily average subscriptions both hit a record high iQiyi "profit first" strategy is beginning to show results.

 

By business, membership services remain a top priority for iQiyi's revenue。According to financial data, during the period, iQiyi member service revenue reached 5.5 billion yuan, an increase of 24% year-on-year, an increase of 17%, also hit a record high, for iQiyi's first quarter revenue jump made great contributions.。

Behind the strong growth of membership services is a sharp rise in subscription membership。In the first quarter, the average number of subscribers per day reached 1.28.9 billion, a record。In addition, iQiyi recorded an average monthly single member revenue (ARM) of 14.35 yuan, also increased month-on-month。

It is reported that the previous average daily membership of iQiyi hovered around 100 million for a long time.。However, since the fourth quarter of last year, iQIYI has accumulated a lot of strength and has achieved a net increase of more than 10 million yuan for the second consecutive quarter, which is quite a bright performance.。This time, iQiyi also revealed that overseas member revenue in Hong Kong, China, the United States, Japan, Mexico and other countries and regions increased by more than 90% year-on-year.。

In the advertising business, revenue during the period reached $1.4 billion, up 5% year-on-year, mainly due to a significant increase in performance advertising revenue.。In terms of content distribution, the business reported revenue of 7.2.7 billion yuan, up 16% year-on-year。According to the financial report, the growth of the business was mainly driven by the increase in the average unit price of cash transactions, which was partially offset by a decrease in the number of barter transactions.。Other businesses contributed 6.75 billion yuan in revenue, down 20% year-on-year, mainly due to the adjustment of the operating model of some business lines and the weak performance of the online game business.。

For the surprise performance, iQiyi founder and CEO Gong Yu said excitedly in the earnings report: "We achieved a good start in the first quarter."。This performance once again validates iQiyi's strong original content capabilities, driving the company's financial performance and market share to record highs, with a net increase of over 17 million members per day in a single quarter, indicating that iQiyi's high-quality growth strategy has been gradually effective.。"

It is reported that in the past year, iQiyi's growth strategy has changed, from "market share priority" to "profit priority," began to pay close attention to the quality of development, contraction of non-core business, strict control of content costs, and strive to increase revenue and reduce expenditure.。

Wang Jun, chief financial officer of iQiyi, also said: "iQiyi set a new record in the first quarter, with total revenue and membership services revenue at its best performance in history.。Our operating profit has grown for six consecutive quarters and our operating cash flow has grown for four consecutive quarters。As iQiyi's financial performance continues to optimize, with improvements in profitability, cash flow and balance sheet health, iQiyi will continue to be committed to creating more value for investors and partners.。

 

Industry demands change high quality long video economic benefits gradually cashed in Gong Yu: works are the only value point

 

There are many highlights in this iQiyi earnings report, but the biggest surprise is the sharp rise in membership service revenue brought about by the surge in the number of daily subscription members.。The reason, the first quarter of iQiyi high-quality long video brought about by the "burst effect" contributed。Among them, when the "wild" is the most prominent。

Since its launch on January 14 this year, in half a month's time, the series has been on the list of 1233 hot searches, the number of times to get Top1 as many as 181 times, the cumulative duration of more than 430 hours on the list, directly helping the broadcast platform iQiyi to reach the top of the App Store free application list。Gong Yu has revealed that the peak of the popularity of "Frenzy," the average daily broadcast time, the average daily number of users covered, member revenue are ranked first in the history of the platform.。

The explosion of "Frenzy" directly led to a year-on-year increase in the number of episodes broadcast across the platform in the first quarter of iQiyi.。According to Yunhe data, in 2023 Q1 iQiyi full-network drama of the effective broadcast of 36.7 billion, up 30% year-on-year, Top10 drama broadcast volume project, iQiyi a exclusive 6 seats (including the broadcast)。According to insiders, in the first quarter of this year, other episodes and variety performances of iQiyi were mediocre, which could not be called explosive models, and the biggest breakthrough was "Frenzy." Therefore, among the 17 million new members, "Frenzy" played a great role.。

In fact, the success of the explosion is not accidental。From an industry perspective, the competitive focus of long video has shifted from content quantity to content quality。Obviously, iQiyi has taken the lead in seizing this opportunity at the crossroads, paying attention to the demands of the industry first, and speaking with the quality of the works, and has achieved certain results.。

Zhang Yi, CEO of AI Media Consulting, a data mining and analysis agency, said that in the long video industry is becoming more and more convoluted, explosions have become a key bargaining chip for the platform to win the competition, because explosions can drive up the number of paid members, which is an important force for the platform to increase revenue.。

In recent years, the member access income-generating mechanism for high-quality works has gradually matured, and the future revenue growth of the platform is likely to be significantly linked to the quality of the works, so it can be said that the economic value of the platform's high-quality long video works is gradually being realized.。Obviously, iQiyi is well aware of this, last week, Gong Yu once lamented in a speech, a few years ago the capital is very active, but now investment, return is not the value point, the work is the only value point.。

Last year, according to a survey by China Consumer News, 70% of the 8,000 questionnaires agreed that "video content is also a commodity" and expressed willingness to pay for high-quality video products.。

Senior vice president of iQiyi confidently predicts that iQiyi will make history again in the second quarter of this year

 

After the release of the results, iQiyi founder and CEO Gong Yu, chief financial officer Wang Jun, chief cultural officer Wang Xiaohui, chief technology officer Liu Wenfeng, senior vice president Duan Youqiao and other company management held a conference call to respond to concerns。

In the conference call, Wang Xiaohui said that iQiyi will unswervingly invest in "self-made head boutique projects," and the number and proportion of "self-made head boutique projects" will increase in the future.。In addition, this year's iQiyi boot volume will increase compared to last year to meet the company's future head project acquisition and scheduling needs.。

Wang Jun said that iQiyi has completed a more systematic and regular scheduling plan, which will help the smooth docking of investment in the start-up of the new drama, meaning that the company has formed an integration from production to broadcasting, which is conducive to the stability of cash flow.。

Gong Yu, on the other hand, suggested that the market has now moved away from the previous "horse racing enclosure" and "extensive" growth stage, turning to high-quality growth demands, both growth and profit.。He further pointed out that the company has always focused on content self-control, and believes that iQiyi is already the strongest in the industry in this field, and will continue to increase its advantages and build deep industry barriers in the future.。

Duan Youqiao said that overall, the membership structure of iQiyi is gradually optimizing.。First, the percentage of iQiyi Annual Card members has increased significantly, helping to improve the health of the company's cash flow in the long run。Second, the LTV (customer lifetime value) and long-term retention rates of the company's card members continue to increase.。Finally, the company's large members, including Kiwi VIP members and Extreme Foundation members, have recently recorded healthy growth.。

He also said that in the first quarter of this year, driven by the strong iQiyi homemade content, the revenue and size of the membership business both set an all-time high, and it is expected that the next quarter's membership revenue and membership size will still have good year-on-year growth.。In addition, he boldly predicted that the second quarter of this year would be the best quarter in iQiyi's history for membership revenue and membership size.。

Despite the bright results, the three major U.S. indexes closed down last night as concerns about the U.S. federal government's debt ceiling triggered a late sell-off in U.S. stocks.。By the end of the U.S. stocks shock, as of today's early morning close, iQiyi fell 7.96%, closed at 5.495 USD。

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