Chinese video streaming firm iQIYI lost over $1.3 billion in 2018, as revenues and subscriber numbers ballooned. The deepening losses reflected ever higher spending on original content production.
Announcing its first full-year financials since a March IPO that launched it onto the NASDAQ, iQIYI said that it lost $1.3 billion (RMB9.1 billion) last compared with RMB3.7 billion in 2017. It lost $506 million (RMB3.5 billion) in the last three months alone. Revenues climbed by 52% year on year to $3.6 billion (RMB25.0 billion)
The company operates a hybrid model of free-to-use, ad-supported content and paid-for subscriptions. At the end of 2018, it had increased its total subscribing members to 87.4 million (98% of whom were paying subscribers) from 50.8 million a year earlier, for a gain of 72%.
“We are confident in generating growth across the board, led by membership services which has demonstrated continued momentum. We maintain our strategic focus on producing original premium content, and will continue to advance our technology innovation and nurture our ecosystem to fully leverage the tremendous IP value in our content,” said founder and CEO Tim Gong Yu.
“Membership business continued to be the main engine driving our growth… 2018 was also a transition year for us, as we devoted more resources towards producing original content which added pressure to our margins,” said Wang Xiaodong, chief financial officer of iQIYI. “We believe our investment in premium content will prove to be very rewarding and help better position the company for long-term growth.”
iQIYI’s parent company, China’s online search leader Baidu, also published its annual results on Friday. These showed revenues of $14.9 billion, up 28% from 2017, or 31% excluding the impact of announced divestures. Baidu’s net for 2018 were $4.01 billion (RMB 27.6 billion), increasing 51% from 2017. For the continuing businesses the profit figure was $4.89 billion(RMB 33.6 billion), up 52%.
The news announcement was made after the close of Thursday trading on the NASDAQ. Shares of iQIYI were little changed at $22.76 apiece. After hours they drifted down to $22.65. That compared with an IPO price of $18 per share. Baidu shares, also listed on the NASDAQ in ADR form, were up 3% on Thursday ahead of its results announcement, closing at $171.81.
By PATRICK FRATER