During the turmoil, iQiyi made a “risky move”. At noon today, iQiyi announced a comprehensive increase in member prices. Starting at 0:00 on December 16, gold VIP regular monthly subscription members will be raised from 25 yuan to 30 yuan, and consecutive monthly subscription fees will be raised from 19 yuan to 22 yuan, an increase of about 20%; ordinary season card members will be raised from 68 yuan to 78 yuan, The consecutive package season is raised from 58 yuan to 63 yuan, an increase of about 10%; the price of regular and consecutive annual card members remains unchanged.
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IQIYI used the Weibo account “IQIYI VIP Member” instead of iQIYI official Weibo to post the price increase news. Perhaps it wanted to deal with it in a low-key manner, but it was counterproductive. The news of “IQIYI member price increase” was still within a few hours. Rush to be the number one in the hot search on Weibo. The comments are also divided. Some users expressed dissatisfaction with the price increase, and some users agreed with the appropriate price increase, but believed that the premise was that the video platform could provide more high-quality content.
In response, iQiyi responded to Geek Park: “The membership subscription price of the video platform has been low. This phenomenon has affected the healthy development of the industry. In order to establish a more benign industrial ecology, let excellent content producers have In return, we will finally provide members with more and better content. We decided to adjust the member price. We will continue to work hard to do a good job in content, make products, and serve users. Thank you for your understanding and support.”
Is it low for a 25 yuan/month iQiyi Gold Member?
Before the price increase, the standard member price of iQiyi was 25 yuan/month (continuous monthly subscription 19 yuan/month), which is not low in the eyes of many ordinary consumers.
Their basis is mainly to compare other domestic mainstream video platforms horizontally. The current membership subscription price of Tencent Video is 30 yuan/month for VIP monthly card, and 20 yuan/month for continuous monthly subscription; the VIP price of Youku is 19 yuan/month, but if it becomes Ali 88VIP , You can also enjoy Youku members at the same time; the price of B station members is 1,250 points a month, and these points need to be contracted (note: recharge for station B fan dramas) worth 25 yuan.
Compared with its main competitors, iQiyi’s membership prices are not low, but just like the response in the announcement, iQiyi believes that it is not that it is too low compared to domestic counterparts, but that domestic video platform membership prices are generally low.
Netflix subscription price in the US (from: Netflix official website)
Take iQiyi’s target Netflix as an example. The subscription price of the basic version in the US is $8.99/month (approximately 60 yuan/month). You can watch HD videos and use the standard version on 2 mobile devices. The subscription price is USD 13.99/month (approximately RMB 91/month), and the premium version subscription price that can watch ultra-clear videos is USD 17.99/month (approximately RMB 128/month). Even after the price increase of iQiyi, the price of Netflix’s membership service of the same standard is 4-5 times that of iQiyi.
In major developed countries and regions such as the Eurozone, Japan and South Korea, Hong Kong, China, and Taiwan, Netflix’s subscription price is basically the same as that in the US after conversion according to the exchange rate. There are certain discounts in developing countries. The lowest is undoubtedly the populous Indian area. The cheapest basic version subscription price is only 149 rupees per month (about 12 yuan), which is only about half of that of UAT.
The global pricing strategy of other overseas video platforms is similar to that of Netflix. The current subscription price of Disney+ is US$8.99/month (about 60 yuan/month); the price of YouTube’s subscription service Premium is US$11.99/month (about 76 yuan/month). moon). The price of its subscription service is basically 2-4 times that of its Chinese counterparts.
There are differences in consumption levels between China and the United States. There is also an objective gap in the quality of content services provided by Uni-Ten, Netflix and Disney. The prices of the two cannot be directly compared. However, the cost of domestic content production continues to rise, and the growth of subscription users has begun to touch the ceiling. At present, increasing the unit price of subscription members is also an inevitable choice for domestic video platforms.
In 2020, iQiyi’s net loss will reach 7 billion yuan, and 4.4 billion yuan in the first three quarters of 2021. While revenue growth has stagnated, the extent of loss narrowing is very limited. In order to achieve a turnaround, in addition to laying off employees and reducing expenses, increasing the membership subscription income, which accounts for more than half of the total income, is the key.
But the subscriber growth of the long video platform has reached the ceiling. Both iQiyi and Tencent Video’s subscribers exceeded 100 million in the second half of 2019. After that, except for a brief surge in the first quarter of 2020 when the epidemic was severe, the number of iQiyi subscription members remained at around 100 million in the next six quarters. As long video shifts from incremental competition to stock operation, it has long been no secret that iQiyi wants to increase prices for members.
At the end of 2019, iQiyi CEO Gong Yu said at the financial report meeting that in 2020, the ARPU value of subscription members (note: average income per user) will be increased by reducing promotions and increasing the price of standard members. However, due to the sudden epidemic, Gong Yu Yu changed his mouth, saying that he would consider raising prices after the epidemic is over.
But from Delta to Omi Keron, the epidemic has turned into a tug-of-war. Gong Yu, who couldn’t wait, offered three tricks after the terrible three quarterly reports. First, large-scale layoffs and cost reductions, and increased membership prices were The second move to increase income.
Price increase does not necessarily solve iQiyi’s crisis
The member price is indeed a big shackle on iQiyi’s neck, but the price increase may not be enough to solve all problems.
IQiyi lost 4.4 billion yuan in the first three quarters of this year. There are currently about 100 million subscribers. The monthly increase of ARPU by 3-5 yuan can bring in revenue of 2.7-4.5 billion yuan. In theory, it can help love in one go. Qiyi turned losses into profits. Even considering the fact that the annual membership price remains unchanged and that some users who have already subscribed will not adjust the price in the short term, the actual increase in ARPU of iQiyi will be lower than the increased member price, but it can still significantly reduce the loss.
However, there is a premise: the number of subscriptions of iQiyi members will not be significantly lost as the subscription price increases. Judging from the situation of Tencent Video next door, this problem does not seem to be too worrying. After raising the member price in April this year, Tencent Video has hardly experienced a large-scale user loss.
But for the current iQiyi, this is a question that has to be cautious. In fact, this year iQiyi is in a difficult situation in content production. The three foggy theaters with high hopes this year, “Goodbye, That Day”, “Octagonal Pavilion Misty”, and “Deadly Wish” performed mediocrely, with an average score of less than 6 on Douban. It is very different from last year’s hits “The Hidden Corner” and “The Silent Truth”. This is also considered by the outside world to be an important reason for the stagnant growth of iQiyi’s subscription membership this year.
In addition, iQiyi’s self-made variety show section has also suffered heavy losses. In August this year, iQiyi announced the complete cancellation of talent show variety shows. The latter has been one of the keys to iQiyi’s user and advertising growth in the past two years.
In the case of the overall lack of content this year, the price increase, iQiyi bears a lot of risk, but in the long run, this may not be a bad thing.
The content industry cannot always rely on capital to burn money. At the moment when market education has been completed and user growth has reached the ceiling, platforms such as UAT will have enough hematopoietic capacity to support themselves, and they can invest in the production of more and better film and television content. It is very necessary to enrich cultural life and even further go overseas to improve the competitiveness of Chinese culture.
However, if better content cannot be provided after the price increase, and the user stays in place or even regresses, users will not be obliged to pay for the losses of UAT. In the final analysis, iQiyi needs to continue to work hard to make content, make good products, serve users, and increase prices, as it promised in its reply. The beginning of the decline.
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