iQIYI has reaped the fruits of micro-short dramas

Author | Huang Yu

Editor | Liu Baodan

As the only independently listed long video platform among "Aiteng Youmang," iQIYI (NASDAQ: IQ) has always been a barometer of the industry.

In the context of fierce competition in both long and short series, with the emergence of hit series being uncertain, iQIYI is attempting to enhance the certainty of its performance growth through various reforms. From the latest performance results, iQIYI's exploration has begun to show initial results.

On May 21, iQIYI released its unaudited first-quarter financial report for the period ending March 31, 2025. The report shows that in the first quarter, iQIYI's total revenue was 7.19 billion yuan. Although this represents a year-on-year decline of about 9%, it has increased by 9% compared to the previous quarter. Additionally, the Non-GAAP operating profit was 460 million yuan, a year-on-year decrease of 58% but a quarter-on-quarter increase of 13%.

In terms of specific business performance, iQIYI's pillar revenue source—membership service revenue—grew by 7% quarter-on-quarter to 4.4 billion yuan, but declined by 8% year-on-year. Online advertising service revenue decreased by 7% quarter-on-quarter to 1.33 billion yuan, down 10% year-on-year. Content distribution revenue increased by 53% quarter-on-quarter to 630 million yuan, down 32% year-on-year. Other revenue grew by 23.9% quarter-on-quarter to 830 million yuan, up 16% year-on-year.

iQIYI's founder and CEO Gong Yu stated during the earnings call that the quarter-on-quarter growth in performance was attributed to the strong return of long video content and strategic investment in micro-dramas.

In his view, "Good content is always on iQIYI" is capturing users' minds and creating opportunities for future commercialization. These developments have strengthened iQIYI's confidence in advancing the upgrade of its business model and content ecosystem based on changes in market and user demand.

Long video content remains the foundation of iQIYI's development.

According to Yunhe data, iQIYI maintained the top market share for long series in the quarter. Among hit series, iQIYI's new work "Bleach" from the "Mist Theater" became the only hit series with a popularity score exceeding 10,000 in the first quarter. The single-episode revenue of this series ranks third in iQIYI's history, second only to "The Knockout" and "The Son-in-Law."

During the same period, the ancient costume drama "White Moon Fan Star" also performed well, achieving a popularity score of 9,600, although it did not exceed 10,000. Additionally, the contemporary drama "I Love You" not only achieved great success in the domestic market but also became the best-performing contemporary mainland drama on iQIYI's international version.

It can be seen that after experiencing a low point in 2024, iQIYI's long series are regaining their rhythm.

The years 2022 and 2023 were relatively glorious years for iQIYI. In 2022, iQIYI had five series with popularity scores exceeding 10,000, whereas prior to that, iQIYI had only two series that reached this milestone. By the end of 2023, the number of iQIYI series with popularity scores exceeding 10,000 had reached twelve.

Throughout last year, although iQIYI continuously produced three hit series—"The Wind Chaser," "The Tang Dynasty Strange Stories: Westward," and "I Am a Criminal Police Officer"—its competitors also performed impressively last year, putting pressure on the growth of its membership revenue Last year, Tencent Video aired nearly ten hit series, while Youku, which was once considered the weakest among "Aiteng Youmang," regained the spotlight with the popular series "Mo Yu Yun Jian" and later launched several well-received series such as "Bian Shui Wang Shi," "Zhu Lian Yu Mu," and "Bai Ye Po Xiao" in the second half of the year.

Mango TV, which has a unique advantage in self-produced variety shows, saw the phenomenon-level hits "Singer 2024" and "Goodbye Lover 4" launched last year. Even in some "lagging" series content, it produced the hit "Xiao Xiang Ren Jia."

In the first quarter of this year, Tencent, Mango TV, and Youku all showed performance in hit series, with Tencent Video featuring "Da Feng Da Geng Ren" and "Yan Hui Shi," Mango TV having "Guo Se Fang Hua," and Youku presenting "Nan Hong."

Clearly, against the backdrop of fierce industry competition, iQIYI's membership service revenue still faces growth pressure in the first quarter.

In December last year, iQIYI lost its position as the number one long video platform in terms of monthly active users. According to Quest Mobile data, in December 2024, iQIYI and Tencent Video had monthly active users of 354 million and 387 million, respectively, while Mango TV had about 277 million and Youku only had 184 million.

From the more closely watched membership numbers, iQIYI's average daily subscription membership size has decreased from 129 million in the first quarter of 2023 to 100.3 million in the fourth quarter, and it stopped disclosing membership numbers last year.

However, iQIYI revealed that its membership size saw healthy growth in the first quarter of this year, with the average monthly revenue per member maintaining a healthy level.

Behind this is the improvement in membership product positioning that meets the needs of a broader user base. Among them, the introduction of high-end family star diamond members with additional free viewing rights has shown good growth potential; the cost-effective basic membership has reached a record high, favored by young and lower-tier market users, with a considerable proportion being first-time subscribers.

According to Tencent's financial report, as iQIYI's number one competitor, Tencent Video's average daily paid membership reached 117 million in the first quarter of this year. This will provide a certain reference for external assessments of iQIYI's membership size.

Moreover, it is not difficult to find that, against the backdrop of sluggish growth in membership services and online advertising, iQIYI is strengthening its commercialization capabilities through multiple measures.

Going overseas has become a core strategy for iQIYI. In the first quarter, iQIYI's international version revenue grew by over 30% year-on-year, with advertising revenue increasing by 40%, and the average daily membership reached a historical high. In the past six months, among the Top 10 most popular mainland dramas overseas, iQIYI's self-produced dramas accounted for four seats, with "Ai Ni" achieving a record high revenue for international version mainland dramas.

It is worth noting that at the 2024 iQIYI iJOY Autumn Enjoyment Conference held in September last year, iQIYI announced its formal entry into the micro-short drama field.

According to iQIYI's blueprint, the "Micro Theater" will focus on male and female audiences as well as the silver-haired demographic, launching two new works weekly, featuring vertical screen content of 1-5 minutes; while the "Short Theater" plans to update one new work weekly, covering various genres such as ancient romance, contemporary romance, and suspense, with each episode lasting about 5-20 minutes, presented in horizontal screen format As of January 13 this year, iQIYI announced a deep cooperation with the currently most popular short drama platform, Hongguo Short Drama, to initiate joint IP development, co-production, and content licensing, aiming to launch more high-quality micro-dramas together.

However, the cooperation between the two parties does not seem to be pleasant. On February 20 this year, Gong Yu publicly accused Hongguo Short Drama of using its dominant position to sign exclusive agreements.

Nevertheless, such an episode seems not to have affected iQIYI's determination to focus on short dramas.

During the Spring Festival, iQIYI launched 28 high-quality micro-dramas, pioneering the "Micro-Drama Spring Festival" and a micro-drama artist Weibo live broadcast relay New Year greeting event. The release of high-quality micro-dramas such as "Home Inside and Outside" and "Please Enter My Embrace" has continuously deepened users' awareness of "watching micro-dramas on iQIYI."

The main iQIYI app focuses on a "members watch for free" model, primarily featuring paid micro-dramas; the iQIYI Lite version promotes free micro-dramas. Currently, iQIYI has over 15,000 micro-drama contents, with free micro-dramas and member micro-dramas each accounting for about half.

Gong Yu stated that the construction of the micro-drama content library has reached a phased goal, and the content reserve is sufficient. In the future, the focus will be on introducing more top new films and fully developing self-produced content. The second and third phases will focus on attracting new members through micro-dramas, especially in lower penetration markets and among older users, allowing micro-drama content to help enhance membership service revenue and actively expand monetization opportunities in advertising and e-commerce.

It is reported that from December 2024 to April 2025, the number of heavy users of iQIYI micro-dramas, that is, users who mainly watch micro-dramas on iQIYI, has tripled.

In addition to short dramas, on April 23, at the "2025 iQIYI World Conference," iQIYI also announced the launch of an e-commerce layout centered on content e-commerce.

iQIYI stated that the purpose of this strategy is to enhance the monetization capability of the free micro-drama business and further leverage iQIYI's advantages in IP, artist resources, and high-quality users.

If the e-commerce business can be well executed, it will undoubtedly open up new revenue sources for iQIYI beyond membership and advertising