Mar 13, 2020 (China Knowledge) - Nasdaq-listed video-streamer iQIYI (IQ) has unveiled a new project known as "Suike" that focuses on medium to long videos, averaging 7 to 8 minutes in length, and has two categories. China’s equivalent of Youtube has also announced these new marketing tactics to save itself from dwindling revenue.
The first is Professional User Generated Content (PUGC), which is mainly uploaded by Multi-Channel Network (MCN), individuals, and professional organizations. In addition, iQIYI's long video content will also be added to its content library, to eventually form a combination of "long + short video". It aims to compare with YouTube.
YouTube, bought by Google for more than USD 1.6 bln, 2 years after it was founded, has exploded to become the world's video platform giant. So far, it has more than 2 bln visitors a month with an annual revenue of over USD 15 bln.
YouTube's revenue almost all came from the ads, especially as a subsidiary of the world's largest advertising distribution platform, Google. It is supported not only by money but also by more advance operations such as advertising search optimization techniques.
In terms of both financial and technical strength, iQIYI obviously cannot be compared with Google. More importantly, in order to maintain its competitiveness in China's video platform market, iQIYI still has not gone out of the nightmare of loss.
The latest financial results show that iQIYI's total revenue of last year shows RMB 29 bln (USD 4.2 bln), or less than a third of YouTube; though up 16% on a year-on-year basis. While the net loss for the whole year was RMB 10.3 bln, up 13% YoY. The only good news is that the growth rate of its net loss has been narrowed, compared with 146% in 2018.
One noticeable trend of iQIYI's advertising revenue is that it shows continuously declines. The revenue is barely enough when paying members of video sites still need to watch a lot of advertising.
Exacerbate by the gloomy economy and current epidemic crisis the business revenue is going to be seriously challenged. Another possible hit could be the decline brought by the short-video format which has many other formidable competitors such as TikTok and Tencent’s video platforms. Instead of counter-attacks, "Suike" app is more of an active defense strategy. Obstinate iQIYI has got no choice but to go on under financial distress and expose to intensifying competition.
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