IQiyi, the Chinese streaming platform that is part of Baidu, revealed its first full year net profits, in 2023, even as its subscriber total dropped by more than 10%.
The company enjoyed a 10% increase in revenue to RMB31.9 billion ($4.5 billion) in the year to December, it said in a regulatory filing on Wednesday. Net income was RMB1.9 billion ($271 million), compared with a loss of RMB136 ($19 million).
Key to the turnaround was subscriber revenue, which grew despite the reduced number of paying members. “Membership services revenue was RMB20.3 billion (US$2.9 billion), representing a 15% increase from 2022. The increase was driven by the growth in [average revenue per user], the average daily number of total subscribing members of the year, and our continuous efforts in refining operations to improve user experience and monetization capabilities,” the company said.
The average daily number of total subscribing members for the October-December quarter was 100.3 million, compared to 111.6 million for the same period last year, a 10% decrease. The total number of subscribing members was 101.1 million as of December 31, 2023, compared to 119.7 million as of December 31, 2022 – a 15% decrease.
The company has operations in Southeast Asia, as well as mainland China, but does not provide a geographical breakdown of revenues or subscribers.
The company, which operates both paid and free tiers, saw advertising revenue also improve by 17% to RMB6.2 billion ($876.6 million). “The increase was primarily driven by the growth of performance-based advertising business and, to a lesser extent, the growth in the brand advertising business,” the company said.
Content distribution revenue was RMB2.5 billion ($346 million), down 4% compared with 2022, “primarily due to the decrease in barter transactions [and] partially offset by the increase of cash transactions and revenue from distribution of theatrical movies invested by iQiyi,” the company said.
Content costs as a component of cost of revenues were RMB16.2 billion ($2.3 billion), representing a 2% decrease from 2022.
“Building on the momentum of an iconic turnaround in 2022, 2023 stood as our best-performing year in corporate history. Key financial metrics, including total revenues, operating and net income, and cash flows, all hit historical highs. In addition, [APRU] grew for five consecutive quarters, which reflected the high attractiveness of our content and the growing value of our membership service,” said Gong Yu, founder, director and CEO.
