On April 23, the annual iQiyi World · Conference was held in Beijing, and the speeches of iQiyi founder and CEO Gong Yu were arranged after Chief Content Officer Wang Xiaohui and Chief Technology Officer Liu Wenfeng.
Since its establishment in 2010, this has been the 15th year of iQiyi's development. In fact, the development of top performers in this industry is also a microcosm of the tortuous process of the long video industry.
In the first decade or so, the long video industry was fiercely competitive and burned money. One market theory suggests that the cumulative total investment exceeded 100 billion yuan; Since 2021, iQiyi has been the first to launch the slogan of "reducing costs and increasing efficiency", making the money burning war a history, and various companies have begun to pursue healthy development; But at the same time, there is also the rapid rise and crushing of short videos. Compared to the profit model, long videos are a "tough business" that requires continuous artistic research.
IQiyi was the first to cross the profit line. In the first quarter of 2022, iQiyi achieved its first quarterly profit since its establishment, and since then, its operating profit has continued to grow. The released 2023 full year financial report shows that iQiyi's total revenue in 2023 was 31.873 billion yuan, with a net profit attributable to shareholders reaching 1.925 billion yuan.
Crossing the high mountain of profitability, that is, overcoming a period of crisis, gives iQiyi greater confidence and confidence to continue its independent development. However, due to the fact that film and television content is a relatively fragile and uncontrollable type of profit, platforms continue to make money, which is still a process that requires continuous efforts. The troubles lingering on iQiyi have not decreased.
Apart from the limited space for literary and artistic creation, Gong Yu stated in his speech that he also faces some challenges in copyright protection, public opinion environment, business models, industrialization, and other aspects.
Taking the business model as an example, long video platforms have always been two legged, with brand advertising and membership revenue, but the two are in a trade-off pattern. Currently, iQiyi's advertising has dropped to 30% of its overall revenue, while the growth rate of its members has also returned to a single digit growth state. After surpassing billions of data, it is no longer in a high double-digit growth state.
As a leader in the domestic long video industry and unable to simply benchmark and pursue overseas platforms such as Netflix and HBO, iQiyi's pioneering path still requires exploration and practice alone.
In Gong Yu's speech, he mentioned eight ideas that iQiyi is currently contemplating: continuing to pursue high quality and diversity in content positioning; Widely applying generative AI in content creation to enhance industrialization level; Improve aging adaptability through product design, business processes, etc; Serve young people and children well; Expand market space; Business model innovation; Unite all forces that can be united to combat piracy; Continue to optimize the industry ecosystem.
It should be mentioned that serving the elderly audience has become a new content, which is different from the concept of the Internet calling for services for young people in the past few years.
Gong Yu pointed out that it is predicted that the elderly population in China will exceed 400 million by 2033, accounting for a quarter of the total population. "In 2024, we have found that the sunset red industry is about to become a sunrise industry." Therefore, the next adjustment of iQiyi's content is to improve its aging adaptability through product design, business processes, and other means.
From this point, it can be seen that unlike the focus of "poet" Wang Xiaohui and "geek" Liu Wenfeng, "businessman" Gong Yu pays more attention to the positioning of the long video industry in the overall social changes and development. The platform needs to shed its idealistic color and focus more on market demand.
The industry likes to describe iQiyi's current situation as "a light boat has crossed countless mountains", but the business model of long videos destined it to be a profession that requires a long run and cannot be easily relaxed for a moment. IQiyi still needs patience and accumulates the energy for long-distance running through one high-quality work after another.
As Gong Yu said when discussing the eight ideas, "The issues I am discussing are likely just one sentence, but they will require us to work for three, five, or even the next decade.".