In 2015, iQiyi's revenue was 5.3 billion yuan Content investment soared by 135.7%

The reason why iQiyi's costs and expenses increased significantly in 2014 was that its content costs increased by 135.7%, broadband costs increased by 75.6%, personnel-related costs increased by 47.9%, and marketing and promotion expenses increased by 119.2%.

iQiyi just announced its privatization at the beginning of the year. IQiyi CEO Gong Yu once sent an internal email saying that after the privatization is completed, iQiyi will seek a domestic listing at an appropriate time. The reporter reviewed Baidu's recently released 2015 annual report and found that iQiyi's revenue in 2015 was 5.295 billion yuan, an increase of 84.3% from 2.873 billion yuan in 2014, and iQiyi's revenue in 2014 also increased by 113.6% compared with 1.345 billion yuan in 2013.

However, iQiyi's costs and expenses are relatively high. iQiyi's costs and expenses reached 7.67 billion yuan in 2015, an increase of 92.8% from 3.983 billion yuan in 2014. iQiyi's costs and expenses in 2014 were compared with 2.088 billion yuan in 2013. An increase of 90.8%. The reason why iQiyi's costs and expenses increased significantly in 2015 compared with 2014 is that its content costs increased by 136%, broadband costs increased by 80.5%, and marketing and promotion expenses increased by 79.8%. The reason why iQiyi's costs and expenses increased significantly in 2014 was that its content costs increased by 135.7%, broadband costs increased by 75.6%, personnel-related costs increased by 47.9%, and marketing and promotion expenses increased by 119.2%.

Due to costs and expenses being higher than revenue, iQiyi has experienced operating losses in the past three years. Among them, iQiyi suffered losses of 2.38 billion yuan, 1.11 billion yuan, and 743 million yuan in 2015, 2014, and 2013 respectively.

During the same period, iQiyi's competitor Youku Tudou was also at a loss. Youku Tudou's losses in the first three quarters of 2015 totaled more than US$200 million (approximately 1.3 billion yuan). Based on this calculation, Youku Tudou's net loss for the whole year of 2015 was between 1.7 and 1.8 billion yuan.

The increase in copyright spending is an important reason for the loss. Youku Tudou purchased 516.0 million yuan in copyright in the third quarter of 2015.

Youku Tudou's revenue in the first three quarters of 2015 was US$735 million. Based on this calculation, Youku Tudou's annual revenue may be approximately US$1 billion, or approximately RMB 6.5 billion. This means that Youku Tudou's revenue in 2015 was higher than iQiyi, but its losses were smaller than iQiyi.

However, iQiyi has always invested heavily in copyright, and has been very successful in buying TV dramas for several consecutive years. A few years ago, the Korean drama "You from the Stars" was a huge hit. Recently, the Korean drama "Descendants of the Sun" bought by iQiyi has been a huge success in China.

It has been reported that since the two episodes of "Descendants of the Sun" are broadcast every week, it takes two months to complete the 16 episodes. Based on the fact that 5 million paying members buy two one-month packages or three month packages at one time, the revenue is about 190 million yuan, but the total price is only 26 million yuan.

Robin Li holds a 16.1% stake in Baidu

. Baidu announced in February 2016 that its board of directors received non-binding proposals from Baidu CEO Robin Li and iQiyi CEO Gong Yu to acquire 80.5% of all issued shares of iQiyi held by Baidu based on its valuation of US$2.8 billion.

Baidu said that based on the non-binding proposal, the two parties will sign a business cooperation agreement after completing the transaction to strengthen strategic cooperation. This is Baidu's most important move at the capital level after Baidu and Ctrip reached a strategic cooperation. Where did Ctrip Holdings go?

Behind Baidu's privatization of iQiyi, more is Baidu's efforts to revitalize its resources. In the future, Baidu may not return to A shares, but it may split its businesses and return one after another. Baidu's important non-search assets such as glutinous rice may also start financing.

From a trend perspective, after divesting the assets of iQiyi and Qunar, Baidu's future net profit will improve significantly.

The Baidu annual report also disclosed that Baidu CEO Robin Li holds 5.59 million shares, accounting for 16.1%. Baidu directors and management hold a total of 16.7%, that is, Baidu President Zhang Yaqin, Baidu CFO Li Xinzhe and other senior executives and directors hold a total of 0.6%. Baidu announced in September 2015 that it would appoint Brent. Kalinix was appointed as a director of the company and a member of the audit committee of the board of directors, and Yang Yuanqing was appointed as a director of the company and a member of the remuneration committee of the board of directors.

Among them, Yang Yuanqing is chairman and CEO of Lenovo Group, and Brent. Kalinix is a former CFO of Uber. Brent was also disclosed in this annual report. Some information about Kalinix and Yang Yuanqing, but did not disclose the details of their shareholding.

Editor: yvonne