Gigi Zhou

Gigi Zhou with Guangfa Securities inquired about iQIYI's overseas development, specifically regarding the profitability of the overseas business compared to domestic membership, and trends in overseas membership app performance and renewal rates.

Answer

Xianghua Yang, iQIYI's Senior VP of International Business, clarified that iQIYI's overseas strategy centers on 'beloved Asian content,' including Chinese, Japanese, Korean, and local content, differentiating it from Western-centric platforms. He noted that micro-dramas are the second-largest content category overseas, showing rapid growth and reaching new highs in revenue and market share during the Chinese New Year. Regarding profitability, he stated that overseas ARPU is generally higher than domestic ARPU, though it varies by country. Membership retention in more developed overseas markets is better than domestic, while in developing markets, it's lower, resulting in an overall retention similar to domestic levels. He added that the overseas business is currently free cash flow positive, but P&L operating income is not yet disclosed due to accounting treatment complexities for IP self-produced content amortization.

Gigi Zhou inquired about iQIYI's overseas development, including its content distribution strategy for C-dramas, the profitability of its overseas membership business compared to domestic operations, and trends in overseas app performance and subscriber retention rates.

Answer

Senior VP of International Business Xianghua Yang detailed iQIYI's 'beloved Asian content' strategy, emphasizing C-dramas as a cost-efficient core, complemented by Japanese, Korean, and local content. He highlighted micro dramas as a rapidly growing, distinctive content category overseas. Yang explained that overseas ARPU varies by region but is generally higher than domestic, with developed markets showing better retention. While the overseas business has positive free cash flow, PNL details are not yet disclosed due to accounting complexities.