Chinese video streamer iQIYI managed to cut its losses in the financial year from RMB10.3 billion in 2019 to RMB7 billion ($1.1 billion) in 2020. But its boost from coronavirus lockdowns was short-lived. Annual revenues were RMB29.7 billion ($4.6 billion), representing a 2% increase from 2019.
Reporting its fourth quarter and full year results on Thursday, the company finished the year with 101.7 million paying subscribers. That was a decrease compared with 106.9 million at the end of 2019 and a 14% tumble since subscriptions peaked in March 2020 at 118.9 million. A “lack of compelling content” caused subscribers to cancel.
The first quarter boost from stay-at-home participation nevertheless lifted membership revenues to RMB16.5 billion ($2.5 billion), a 14% increase from 2019. Online advertising revenue was down 18% at RMB6.8 billion ($1.05 billion), reflecting hit to China’s macroeconomic environment under COVID for much of last year. Content sales revenue was RMB2.7 billion ($408 million), representing a 5% increase from 2019.
Speaking on a conference call after publication of the raw data, Gong Yu, iQIYI founder and CEO, said that it suffered from multiple content problems through much of 2020. These included: a weak supply of new theatrical movies, reflecting a theatrical box office slowdown; weak series supply and “censorship impact” for TV drama; and weakness in new animation content supply.
The company argues that it enjoyed a positive change in fortunes in the fourth quarter of 2020. The period included iQIYI’s largest ever refinancing since its IPO, which will allow it to cut finance costs in 2021 and allow it to expand content investment again. The fourth quarter also saw more in-house produced content becoming available and the launch of premium VOD services.
“We maintained our leading position in our key content offerings, including dramas and variety shows, based on third-party data. Meanwhile, we made breakthroughs in certain areas, such as original films, intelligent screens and VR,” said Gong Yu in a prepared statement. “In 2021, we will continue to provide a more diversified portfolio of high-quality content to our users and enhance the perceived value of our paying subscribers. This, in our view, should help to revive the growth of our subscribers and revenue amid the recovering macro environment.”