Chinese Streamer iQiyi Enjoys ‘Miraculous’ Fourth Quarter Surge in Subscribers and Profitability

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(Selection) China-based video streamer iQiyi achieved a surge in paying subscriptions and achieved web earnings within the fourth quarter of 2022. Whereas nonetheless loss-making over the complete 12 months, the corporate hailed its turnaround as “miraculous.”

Within the October-December interval, gross revenues have been RMB7.6 billion ($1.1 billion), representing a 3% improve 12 months over 12 months, the corporate mentioned in a regulatory submitting. Web revenue attributable to iQiyi was RMB304 million ($44.1 million), in comparison with a web lack of RMB1.8 billion in the identical interval in 2021.

Over the course of the complete 2022, complete revenues have been RMB29.0 billion ($4.2 billion), representing a 5% lower from 2021. Web losses decreased from RMB6.2 billion to RMB136 million ($19.7 million).

Through the fourth quarter, the typical day by day variety of subscribing members (excluding people with trial memberships) was 110.9 million, in comparison with 96.4 million for a similar interval in 2021, and 100.2 million within the third quarter in 2022. Month-to-month income per subscriber was unchanged year-on-year at RMB14.2 ($2.04).

“We wrapped up a outstanding 12 months of turnaround with excellent efficiency within the fourth quarter. Our drama market share reached historic excessive, in accordance with [measurement firm] Enlightent, so have been our membership revenues, working earnings, working cashflow and free money movement. We recorded over 10 million web subscriber additions in This fall,” mentioned Gong Yu, CEO. In a separate letter to shareholders, Gong hailed the 12 months as “miraculous.”

“The success of the quarter was pushed by our unique blockbusters. Wanting ahead, we’ll proceed to give attention to our unique content material technique to ship high-quality progress, and to create extra worth for our stakeholders,” Gong mentioned.

The corporate believes it has considerably improved its means to provide and ship high-quality unique content material of large enchantment to the general public, enabling it to ship a unbroken stream of blockbusters. Within the fourth quarter it launched six new blockbuster dramas. And it has been rewarded by the rising consideration of subscribers, who elevated their viewing time 40% year-over-year and by 30% quarter-over-quarter.

“By the top of 2021, the long-form video trade had modified tremendously and not blindly pursued market share. Content material high quality and profitability have been tightly aligned. We have been the primary to foresee that these adjustments would result in a brand new stage of rational improvement in your complete trade. The main focus of long-form video competitors would shift from content material amount to content material high quality, and extra gamers would pursue enhancements in operational effectivity and profitability,” mentioned Gong in his letter to traders. “With this shift in precedence, we launched a sequence of measures. We took one step again by specializing in our core companies and downsizing our non-core companies.”

Between its flotation on the NASDAQ inventory market in 2018 and late 2021, the corporate struggled with bulging losses and counteracted these with quite a few capital elevating workouts. An extra three money calls over the previous 12 months, elevating an extra $1.3 billion of capital, is portrayed as one in all two steps ahead. The corporate argues that it has stabilized its monetary place – it has recorded 5 consecutive quarters with enhancing working margins and three quarters in a row with optimistic money movement – and financially positioned itself for the following three to 5 years.

“By way of this course of, we discovered worthwhile traders who remained agency supporters regardless of market volatility, together with Baidu, PAG [and] Oasis,” mentioned Gong.

The opposite claimed step ahead is iQiyi’s dedication to and aggressive benefit in long-form content material.

“Though customers might spend extra time on short-form movies, solely high-quality long-form movies can meet customers’ demand in consumption improve over the long run. As proof, a rising variety of customers loved our premium content material and signed up for our subscription package deal in 2022, and the sturdy momentum continues,” mentioned Gong. “The flexibility to provide premium content material is our core aggressive moat.”

Supply: Selection by Patrick Frater  Feb 24, 2023 3:21am PT

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