As of September 30, 2018, the operating loss was 2.6 billion yuan ($377.3 million) due to increased investment in content ecology. The total amount of cash, cash equivalents and short-term investments held by the company is RMB 9.7 billion ($1.4 billion).
In the current quarter, the membership service revenue was 2 billion 900 million yuan (US $415 million 300 thousand), an increase of 78% over the same period last year. Subscriber membership reaches 80 million 700 thousand, of which the percentage of paid members exceeds 98%. Quality content is the most important driving force for membership growth. In the third quarter, the blockbuster network drama Yanxi Strategy launched by Ichiyi broke a number of industry records, Chinas new rap, Chinas good voice, Qi Hua said and other popular works have been widely praised, rapidly upgraded the membership.
The online advertising revenue is RMB 2 billion 400 million yuan (US $348 million 900 thousand). As an important part of the business model, Achievement says it is working to expand and optimize its customer base to meet potential challenges and achieve sustainable growth. At present, the proportion of innovative advertising marketing in total advertising revenue is also expanding.
Outside the membership and advertising business, the Netflix+ model shows strong growth momentum. Content distribution revenue of 834.6 million yuan ($121.5 million) grew by 220% in the quarter from a year earlier, accounting for 12% of total revenue. The significant increase was due to the distribution of multiple quality content. Benefiting from the impressive growth in literature, games, IP licensing and artist brokerage, other revenues amounted to 831 million yuan ($121 million), up 157% from the same period in 2017.
Iqiyi is continuing to expand its ecological layout. In July, in the game area, Iqiyi acquired mobile game development and operators mutual entertainment. In August, Aichi jointly established a joint venture with Xinying Sports, a leading Chinese provider of sports marketing, sports culture dissemination and copyright distribution services. The new company will operate Achievement Sports APP and other sports-related businesses, and the light asset model will ensure that it benefits from the Achievement Ecosphere while attracting more resources and investment.
Iqiyi continued to invest more in R & D this quarter. The R&D cost is 558.4 million yuan ($81.3 million), an increase of 63% over the same period in 2017, mainly for the increase in personnel-related pay. At present, various cutting-edge technologies are being applied to better enhance user experience and produce and distribute content.
Achievement also looks ahead to the fourth quarter of 2008: total revenue is expected to be between 6.48 billion yuan ($943.5 million) and 6.75 billion yuan ($982.8 million), up 43% and 49% year-on-year (the outlook represents only a preliminary forecast based on the current situation, not excluding the possibility of future adjustments). Dr Gong Yu, founder, director and chief executive of Achievement, said: We continued to achieve robust performance growth in the third quarter, and a series of strong user indicators further confirmed our leading position in the industry. The continuous introduction of quality content drives the strong growth in the number of members and the revenue of member services. The blockbuster online drama The Promotion of the Jubilee exploded all summer, demonstrating our strong ability and potential in producing high-quality content. We are also constantly improving and enriching the profitability of our business and are committed to further enhancing and improving our ecosystem through the application of advanced technology, thereby bringing long-term value growth to shareholders. Source: NetEase science and technology report editor: Joe Chun Jing _NBJ11279
Achievement also looks ahead to the fourth quarter of 2008: total revenue is expected to be between 6.48 billion yuan ($943.5 million) and 6.75 billion yuan ($982.8 million), up 43% and 49% year-on-year (the outlook represents only a preliminary forecast based on the current situation, not excluding the possibility of future adjustments).