Chinese video streaming giant iQIYI saw a further leap in its subscription base, to 106 million. But the company’s latest corporate filing revealed that losses also expanded to a net $516 million over the three months between July and September.
The company, which is an affiliate of Internet search and services group Baidu, said that total subscriber numbers at the end of September hit 105.8 million, of which 99.2% were paid for. That implies a net paying total of 105 million, an increase of 31% since September 2018.
The number compares with the 60.6 million paying subscribers revealed by Netflix in North America, and a further 97.8 million in the rest of the world.
Revenues at iQIYI hit RMB7.4 billion ($1.03 billion) in the quarter, only a 7% increase, with the top line number hit by a 14% drop in advertising.
Net losses increased from RMB3.1 billion in the third quarter of last year to RMB3.7 billion.
Despite the growing losses, the company proclaimed “solid progress during the quarter” and an onward “march toward our vision of building a technology-based entertainment giant,” according to founder and CEO Gong Yu.
That optimism came from a shift in the revenue model, whereby subscriptions accounted for more than half of quarterly sales.
“This once again demonstrated the strength of our platform and validated our dedication to producing high quality original content. Leveraging our cutting-edge AI technology, we are continually fine-tuning our content offerings, optimizing our monetization efficiencies, and exploring potential new runways for future growth,” Gong said in a statement. “With the rapid development of 5G, we believe there will be astonishing new opportunities ahead, and we will continue to push forward the convergence between technology and art to create deeper value and greater prospects for the future.”
The company said that its content costs had risen by just 3% compared with the same quarter last year. Content costs were RMB6.2 billion ($871 million).
For the fourth quarter, the company foresees essentially flat revenue. In guidance for investors, iQIYI said that total net revenues will end up somewhere between a 2% retreat and 4% growth.