What was changed
iQiyi, one of China's largest video platforms, had lost money since its founding in the early 2010s; 2021 closed with an operating loss of RMB4.48B as content spending outpaced revenue.
Founder and CEO Gong Yu, who took direct charge of content, cut costs from late 2021: revenue costs fell 19% in 2022, R&D and administrative costs dropped over 20%, and spending was tied to the ROI of original hits.
The 2022 results were the first annual profit in company history: revenue RMB29.0B (-5%), operating income RMB1.31B (non-GAAP RMB2.17B) and non-GAAP net income of RMB1.28B, with membership revenue growing.
What it achieved
FY2022 revenue RMB29.0B (-5%) but operating income RMB1.31B (first annual, vs -RMB4.48B) and non-GAAP net income RMB1.28B (first annual), with content costs down 19%.
Why it worked
Content costs fell 19% without destroying subscriber growth.
Original hits drove membership gains and margins.
Cost discipline extended to R&D, admin and headcount.
What can be applied
In a structurally loss-making industry, refusing to outspend rivals on content and managing every cost line can flip the economics even while revenue shrinks.
Aftermath
iQiyi became the first major Chinese streaming platform to reach annual profitability, with Tencent Video and Youku still loss-making, and Gong Yu promised 'high-quality growth' over volume.
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