At present, the main revenue sources of iQiyi platform are membership fees and advertisements, while the impact brought by the short video platform is to attract members and advertisements from long videos. Looking at the financial reports of iQiyi in recent years, the number of members that had been high hopes has encountered a bottleneck, advertising revenue has declined due to the impact of the general environment, and the hat of continuous revenue loss has not been completely removed. The three key problems are Performance is difficult to make the capital market give a good face.
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At present, the main revenue sources of iQiyi platform are membership fees and advertisements, while the impact brought by the short video platform is to attract members and advertisements from long videos. Looking at the financial reports of iQiyi in recent years, the number of members that had been high hopes has encountered a bottleneck, advertising revenue has declined due to the impact of the general environment, and the hat of continuous revenue loss has not been completely removed. The three key problems are Performance is difficult to make the capital market give a good face.
Affected by the news of layoffs, the stock price of iQiyi’s U.S. stock market continued to plummet. On December 8, iQiyi’s stock price closed at $5.35. Compared with the high of $28.97 in March this year, the total market value has shrunk exponentially.
Source: Futu Niuniu
The time and place are right, and iQiyi seems to be losing. Who is wrong? Is it the long video platform model represented by iQiyi, or the brutal growth of short video apps that “do not emphasize martial arts”?
01
Laid off employees pay attention to “short video” for job hunting
On social platforms, there are “old people” who have been exposed to layoffs by iQiyi from school recruits to “elderly people” with a working experience ranging from three to five years.
“This layoff probably started on November 25. Both the middle and the grassroots have been laid off, but there are mainly young people, and there are some regular employees who are also on the list of layoffs.” Working as an operation intern at iQiyi Yuanyuan (a pseudonym) told reporters, “The departments associated with users have the greater impact of layoffs. Departments such as project implementation and back-end support are relatively stable and will not be affected much.”
According to media reports by Sina Technology and other media, in the layoffs of iQiyi, more middle-level (director-level) employees were laid off. Older employees, older employees, and higher salaries were mostly among those who were laid off; Money-based departments such as marketing, distribution, channel cooperation, etc., lay off more than 30% of the staff, and up to 50%.
In response to the layoffs, a shared document titled “IQIYI layoffs information sharing, mutual help and mutual warmth” appeared on the pulse.In the information displayed in the document, the retrenched positions mainly include operations, marketing, etc.; in terms of compensation, those with a relatively long working life will receive “N+1” compensation, while those with only a few months of work will receive “1.5” compensation. .
Source: Maimai
According to the relevant provisions of the “Labor Contract Law”, the reduction of more than 20 employees, or the reduction of less than 20 people but accounting for more than 10% of the total number of employees in the enterprise, is an economic layoff. According to the layoff ratio of 20%-40%, iQiyi meets the economic layoff standards this time. The compensation standard for economic layoffs is based on the laborer’s years of work in the unit, and one month’s salary is paid to the laborer for every full year.者Pays. If the period is more than six months but less than one year, it is calculated as one year; if the period is less than six months, the laborer shall be paid the economic compensation of half a month’s salary.
In this shared document, some retrenched employees have already begun to adjust their job search directions. Some job applicants pointed out that “I am already changing their resumes and do not plan to leave Beijing for the time being. I plan to try short videos.” “Xiaohongshu” is a priority; at the same time, internal push messages such as Bytedance, Kuaishou, Ali, Tencent, and NetEase have also been listed.
02
Increasing revenue and reducing expenditure is the “normal”
According to the prospectus of iQiyi, from 2016 to the end of 2020, the number of employees employed by iQiyi were 4794, 6014, 8577, 8889, and 7721. Beginning in 2019, iQiyi has begun to reduce the number of employees, and by the end of 2020, it has decreased by 1,168 people compared with the previous year.
Based on the 7,721 people counted at the end of 2020, and a rough estimate of the layoff ratio of 20%-40%, the number of people cut by iQiyi this time is about 1,544-3088. It can be said that the rhythm of “slimming” has been maintained since 2019.
The layoffs of iQiyi are not without warning. At the analyst call of iQiyi’s third quarterly report on the evening of November 17, Gong Yu, founder and CEO of iQiyi, said: “For iQiyi, the focus is on increasing revenue and reducing expenditure. , Cut off inefficient businesses and projects, increase and try new monetization opportunities.”
“Member advertising, online advertising services, content distribution, and others” are the four main business directions shown in iQiyi’s financial report, with member advertising accounting for the highest proportion. But after 2019, the growth of iQiyi’s membership began to slow down. From the financial report for the third quarter of 2021 just announced by iQiyi, as of the end of the third quarter, the number of subscription members of iQiyi was 103.6 million, a year-on-year decrease of 1.15% and a month-on-month decrease of 2.45%. The membership business performed poorly, and iQiyi’s advertising business also stalled. In the third quarter of this year, iQiyi’s online advertising service revenue was 1.7 billion yuan, a year-on-year decrease of 10%.
From 2017 to 2019, iQiyi’s net loss expanded from 3.7 billion yuan to 10.3 billion yuan. By 2020, it improved slightly, but the net loss still reached 7 billion yuan. In the report for the third quarter of 2021, iQiyi had a net loss of 1.734 billion yuan, compared with a net loss of 1.176 billion yuan in the same period last year, and the loss increased by 47.45% year-on-year.
“Iqiyi has been in a state of loss, and the market has been squeezed by competitors. It will be even more difficult to make money next year.” Zhang Xiaorong, Dean of Deepin Technology Research Institute, told a reporter from IT Times, “Plus, it faces the risks of delisting and lack of financing. , Increasing income and reducing expenditure has become the only option, and only layoffs.”
In October of this year, iQiyi took the initiative to cancel the advance on-demand program, which made its financial situation worse. Cui Lili, executive director of the Electronic Commerce Institute of Shanghai University of Finance and Economics, also believes that this situation should be within expectations. In accordance with the requirements of recent regulatory policies, the long video platform has made adjustments in terms of membership rights and other aspects, making the fees that were not enough to cover the cost even more stretched, so it has followed the trend and started to lay off employees.
It is reported that iQiyi’s own revenue expectations for the fourth quarter are not ideal either. IQiyi expects total revenue in the fourth quarter of this year to be between 7.08 billion yuan and 7.53 billion yuan, a year-on-year decrease of 5% to an increase of 1%. In May of this year, iQiyi told Reuters that the loss may continue for five more years.
03
Threat from the skit
In the conference call after the release of the third quarter of 2021 earnings report, Gong Yu said that the biggest problem the industry is encountering now, if simplified to the relationship between supply and demand, there is a serious shortage of content supply. There are also many reasons behind it. One is the impact of the epidemic. Up to now, the number of iQiyi movies online has not been as good as half of the same period in 2019; the proportion of traditional TV dramas is even less, perhaps only about 1/3 of previous years; web dramas are also due to the epidemic, The launch is delayed due to audits and other reasons. Even if it is launched, the quality is discounted. In addition, the competition for users of short videos is also an important objective reason.
QuestMobile data shows that China’s short video duration share will reach 19.5% in 2020, which is much higher than the 7.2% of online video. Compared with long videos like iQiyi’s “Broken Arms for Winter”, short videos like Douyin seem to be bathed in spring. According to media reports, Douyin is testing the payment function for skits. Previously, Kuaishou has launched a short play payment model. The payment model of Douyin skits is similar to that of paid novels. The payment is based on the number of episodes, starting at a minimum of 1 yuan per episode, and it supports a one-time payment to unlock the entire drama. The paid skit can be watched repeatedly, and there is no time limit.
Source: QuestMobile
A reporter from “IT Times” entered “short dramas” on Douyin, and the top three on the hottest list all had more than 7 million popularity, with a cumulative broadcast volume of over 100 million, and the number of episodes of each skit hardly exceeded 20. Each episode is only one or two minutes long. According to relevant media, compared with TV series and movies, the shooting cycle of short dramas is basically controlled within 10 days, and the production cost is mostly around several hundred thousand yuan. The market is opened in a low-cost and high-yield manner, and there are also short dramas. Extensive user base.
On the other hand, Iqiyi’s “Wind up Luoyang” is expected to have a set area of 40,000 square meters, 5,000 pieces of clothing, and more than 5,000 pieces of actors’ various shapes and decorations, except for Huang Xuan, Wang Yibo, and Song Qian. He Song Yi starred 4, the number of professional actors reached 650, and the number of extras was 25,000. Compared with the low cost and low time consumption of short videos, the money-burning production cost behind this kind of self-made content has obviously become a heavy burden on long video platforms. In terms of short videos, iQiyi has not tried it. Short video products such as “Hangbei”, “Gingerbread”, “Nadou” and “Jinshi” have not caused much waves. In this round of layoffs, “Short” The video product “XianKe” will be merged with other products, and only 40% of people can stay”, which also shows iQiyi’s dilemma in the field of short video.
Author/IT Times reporter Jiang Liwen
Editor/Wang Xin kicked sister
Typesetting / Ji Jiaying
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