The unaudited financial statements for the second quarter ended June 30, 2020 were released. According to the financial report, iqiyi’s total revenue in the second quarter of 2020 will reach 7.4 billion yuan (about US $1 billion), a year-on-year increase of 4%. The total revenue and year-on-year growth rate meet the company’s previous expectations. As the main revenue pillar of iqiyi, the revenue of its members reached 4 billion yuan in Q2, with a year-on-year growth of 19%. Advertising revenue, content distribution revenue and other revenue were 1.6 billion, 860 million and 918 million respectively.
it is worth noting that the revenue cost of iqiyi decreased by 2% year-on-year, and the loss rate dropped to 17%, which was significantly lower than that of 26% in the same period in 2019.
in this regard, Wang Xiaodong, chief financial officer of iqiyi, said: “we continue to make strategic investment in original content to improve self-control ability, and at the same time invest more prudently in all aspects, which makes the loss rate narrow.” In the second quarter, iqiyi launched such popular dramas as “blame you for being too beautiful” and “biography of strange people in the early Republic of China”. In particular, the suspense short play “secret corner”, which explores family education issues in the “misty theater”, has aroused great market repercussions. Iqiyi’s self-made variety shows “youth has you 2” and “I’m a singer writer 2” have also attracted wide attention. According to public information, in the first quarter of 2020, when the epidemic affected the delay of variety show production or emergency transfer of cloud recording, iqiyi still maintained the new quantity of 10 films.
although it has maintained the continuous output of popular content, the growth of iqiyi’s revenue and cost has not increased as a result. According to the financial report data, as of the second quarter of 2020, iqiyi’s revenue cost has declined for three consecutive quarters, and the proportion of content expenditure has gradually stabilized at about 60% of the total cost.
according to Tencent’s financial report, due to the impact of the macro external environment, weak demand for brand advertising and delay in the production and launch of some content, the advertising revenue of Tencent video decreased, resulting in a 25% decline in media advertising revenue. It can be seen that under the background that the recovery of the external environment will take some time, the video platform needs to “increase revenue and reduce expenditure”, which will focus on improving operational efficiency and capital utilization efficiency.