Surging News reported on May 19 that the remuneration of actors and actresses has dropped to less than 50 million yuan (one actor and one play), and the plays broadcast now are in line with the price limit. Gong Yu, founder and CEO of iqiyi, introduced it in a conference call after the financial report was released on May 19.
Gong Yu talked about the issue of actors remuneration that the industry has been concerned about in the conference call, which is also a very important part of the content cost of iqiyi.
In August 2018, three video websites and six major production companies issued a joint statement to control the cost including the remuneration of actors. Because of the production cycle, the real production time is from the end of last year to now. This has played a great role. The actors remuneration has fallen to the peak of the limit at that time. A play is under 50 million yuan. Now the plays broadcast are in line with the limit price. The previous price is as high as One point five More than 100 million yuan (the remuneration of an actor for a play), of course, is a front-line actor. In the latest industry statement, we believe that the cost will be further reduced, mainly The cost of the actors pay.
Gong Yu admits that the influence of actors remuneration on the content cost of iqiyi is not small.
Not only for front-line actors, but also for more details. In terms of production, we have reached some consensus on some norms in terms of suppliers, some remuneration for non front-line actors and so on. But also because of the production cycle, the impact may be significant next year or even the next year. On the other hand, Id like to say that about a year or two ago, the cost of the main content of the whole industry was determined by the price of copyright purchasing content, but in the last two years, more than half of the main content of the whole industry, including plays, variety shows, and heads, came from self-made content, so the pay of actors and so on has a greater impact on us.
Iqiyis member service revenue benefited from the increase of users entertainment demand during the epidemic. In the first quarter of 2020, iqiyis member service revenue is 4.6 billion yuan six point five four five Billion US dollars), up 35% from the same period in 2019.
The time of this years college entrance examination has been delayed for one month, so according to the Convention, other grades of primary and secondary schools begin to have holidays after the college entrance examination, which is later than the usual year, but there is a habit in China that primary and secondary schools usually start on September 1, so the summer vacation this year will be shorter than the previous summer vacation for a certain time, but we also think that the probability of everyones travel will be reduced, and the time of staying at home will be longer, So we think the consumption of online entertainment will be stronger than before, but the time will be shorter.
In response, Gong Yu analyzed: in April and may, we looked at user behavior habits, and they were reducing the viewing time. It may be a little tired to watch, because a large number of our users may have watched the video for too long during the epidemic. So its a natural decline. For example, after the end of the Olympic Games, when users watch TV and video for too long, per capita consumption will drop, which is a rule. In addition, return to work, return to production, return to school and so on, these factors will also reduce this consumption. Secondly, the number of paying users is decreasing, which is a special phenomenon after the epidemic.
However, the new crown epidemic also challenges Chinas macro-economic environment. As a result, iqiyis online advertising revenue is 1.5 billion yuan two point one seven zero Billion US dollars), down 27% year on year.
During the epidemic, brand advertising revenue was greatly affected. On the one hand, advertising services. The budget for advertising is now recovering, but it is much less than before, Gong Yu said in a conference call. And then the second one is our delayed variety show, which has a negative impact on our advertising revenue. Maybe some of the programs originally broadcast in the second quarter will be postponed to the third quarter or it should be a one-time impact of the epidemic.