iQIYI Inc (IQ) 2018 Q4 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the iQIYI Fourth Quarter and Fiscal Year 2018 Earnings Conference Call.

女士們、先生們，感謝大家的支持，歡迎參加愛奇藝2018年第四季及財年業績電話會議。

(Operator Instructions) I must advise you that this conference is being recorded today, 22nd of February 2019.

（操作員說明）我必須告知您，本次會議將於今天（2019 年 2 月 22 日）進行錄製。

I would now like to hand the conference over to Dahlia Wei, Director of Investor Relations.

現在我想將會議交給投資者關係總監 Dahlia Wei。

Thank you.

謝謝。

Please go ahead.

請繼續。

Thank you, operator.

謝謝你，接線生。

Hello, everyone, and thank you all for joining iQIYI's Q4 and full year 2018 earnings conference call.

大家好，感謝大家參加愛奇藝2018年第四季及全年財報電話會議。

The company's results were released earlier today and are available on the company's Investor Relations website at ir.iqiyi.com.

該公司的業績於今天稍早發布，可在該公司的投資者關係網站 ir.iqiyi.com 上查閱。

On the call today are Dr. Yu Gong, our Founder, Director and CEO; and Mr. Xiaodong Wang, our CFO.

今天參加電話會議的是我們的創辦人、董事兼執行長龔宇博士；以及我們的財務長王曉東先生。

Dr. Gong will give a brief overview of the company's business operations and highlights; followed by Xiaodong, who will go through the financials and guidance.

龔博士將簡要介紹公司的業務運作與亮點；其次是曉東，他將負責財務和指導工作。

After their prepared remarks, we will hold a Q&A session.

在他們準備好發言後，我們將舉行問答環節。

Before we proceed, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。

Forward-looking statements are subject to risks and uncertainties and may cause actual results to differ materially from our current expectations.

前瞻性陳述存在風險和不確定性，可能導致實際結果與我們目前的預期有重大差異。

Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC.

潛在風險和不確定性包括但不限於我們向 SEC 公開提交的文件中概述的風險和不確定性。

iQIYI does not undertake any obligation to update any forward-looking statements except as required under applicable law.

除適用法律要求外，愛奇藝不承擔更新任何前瞻性聲明的義務。

With that, I will now turn the call over to Dr. Gong.

現在我就把電話轉給龔醫生。

Please go ahead.

請繼續。

Hello, everyone, and thank you for joining us for our fourth quarter and full year 2018 earnings call.

大家好，感謝您參加我們的 2018 年第四季和全年財報電話會議。

We delivered another quarter of solid growth.

我們又實現了一個季度的穩健成長。

Total revenues reached RMB 7 billion, up 54% year-over-year.

總收入達人民幣70億元，年增54%。

We ended the year with total revenues of RMB 25 billion, up 52% year-over-year.

截至年底，我們的總收入為人民幣 250 億元，年增 52%。

Throughout the year, we continued to generate growth across various key operational metrics, including subscribers, engagement levels and the time spent.

全年，我們的各種關鍵營運指標持續成長，包括訂閱者、參與度和花費的時間。

The number of total subscribers reached 87.4 million as at the end of 2018, representing a 72% year-over-year growth.

截至2018年底，總用戶數達到8,740萬，年增72%。

Our membership business continued to be the main engine of our growth, with revenues increasing 76% year-over-year to RMB 3.2 billion during the fourth quarter.

會員業務持續成為成長的主要引擎，第四季營收年增76%至人民幣32億元。

This again was driven by growth of the number of subscribers, which recorded a net addition of 6.7 million sequentially and 36.6 million year-over-year.

這再次受到訂閱用戶數量成長的推動，訂閱用戶數量連續淨增加 670 萬，較去年同期淨增加 3,660 萬。

The significant growth was primarily a reflection of our premium content, which is clearly driving subscribers' conversion and stickiness.

顯著的成長主要反映了我們的優質內容，這顯然推動了訂閱者的轉換和黏性。

Our self-produced drama series, including Tang Dynasty Tour, The City of Chaos and Original Sin, performed well in the fourth quarter.

我們自製的電視劇《大唐之旅》、《混亂之城》、《原罪》在第四季表現出色。

In addition, movie content also played an important role in driving subscriber growth.

此外，電影內容在推動用戶成長方面也發揮了重要作用。

We released a number of popular theatrical movies on our platform shortly after they hit the box office over the summer and the national holiday in October.

我們在暑期檔和十月國慶日票房取得好成績後不久，就在我們的平台上發布了多部熱門院線電影。

These movies included, Hello, Mr. Billionaire, Dying to Survive and Project Gutenberg, among others.

這些電影包括《你好，億萬富翁先生》、《我不是藥神》和《古騰堡計劃》等。

Our joint membership program with JD.com continued to make good progress during the quarter.

我們與京東的聯合會員計劃在本季度繼續取得良好進展。

It helped contribute a steady inflow of annual subscribers.

它有助於貢獻年度訂戶的穩定流入。

We also deepened our partnership with China Mobile.

我們也深化了與中國移動的合作關係。

We launched our combined membership plus mobile video data package with its video streaming app, MIGU.

我們透過其視訊串流應用程式咪咕推出了會員+行動視訊數據組合套餐。

Recently, we also extended our joint membership program with Ctrip, where iQIYI Diamond VIP and QIYIGUO annual members can enjoy certain priority travel services from Ctrip.

近期，我們也延長了與攜程的聯合會員計劃，愛奇藝鑽石VIP和奇藝果年度會員可以享受攜程的某些優先旅行服務。

And the Ctrip Prime members can activate an 8-month VIP membership from iQIYI.

攜程Prime會員可啟動愛奇藝8個月VIP會員。

In addition, we continued to broaden our cooperation with various commercial banks, financial institutions and other service providers to further enhance VIP benefits.

此外，我們不斷擴大與各商業銀行、金融機構等服務提供者的合作，進一步提升貴賓權益。

Access to our premium content and special privileges continue to incentivize our free users to convert into subscribers.

存取我們的優質內容和特權繼續激勵我們的免費用戶轉化為訂閱者。

I will now turn to our advertising business.

我現在談談我們的廣告業務。

For the fourth quarter, advertising revenue grew 9% year-over-year to RMB 2.2 billion.

第四季廣告收入較去年同期成長9%至22億元。

We further enhanced our ability to provide innovative advertising solutions.

我們進一步增強了提供創新廣告解決方案的能力。

For example, we began offering vertical and interactive ads for our first portrait mode short-form drama series, Ugh!

例如，我們開始為我們的第一部肖像模式短劇《呃！》提供垂直和互動廣告。

Life!

生活！

For full year 2018, advertising revenue grew 21% year-over-year to RMB 9.3 billion.

2018年全年，廣告收入較去年同期成長21%至93億元。

More advertisers are becoming interested in our original content.

越來越多的廣告商對我們的原創內容感興趣。

Our other business also continued to grow.

我們的其他業務也持續成長。

Other revenues grew significantly by 129% year-over-year, and accounted for 16% of total revenue during the first quarter.

其他營收較去年同期大幅成長129%，佔第一季總營收的16%。

The growth was broad-based and, in particular, was driven by gaming, IP licensing and our talent agency business.

這一成長基礎廣泛，尤其是受到遊戲、知識產權許可和我們的人才代理業務的推動。

On the content side, we continue to focus on producing high-quality content, especially original, premium and innovative content.

內容方面，我們持續專注於優質內容的製作，特別是原創、優質、創新的內容。

For dramas, we launched a number of original titles during the fourth quarter, including Tang Dynasty Tour, The City of Chaos and The Original Sin as well as a few licensed drama series such as The Story of Minglan and the Like A Flowing River.

電視劇方面，我們在第四季推出了多部原創作品，包括《大唐行》、《亂城》、《原罪》，以及《明蘭傳》、《大江大河》等多部正版授權劇。

As I mentioned earlier, we also released our first portrait mode short-form comedy series, Ugh!

正如我之前提到的，我們也發布了我們的第一個肖像模式短片喜劇系列，呃！

Life!

生活！

Each of these dramas has received great reviews and have become quite popular.

這些電視劇都獲得了很高的評價，而且非常受歡迎。

For variety shows, the fifth season of Qipa Talk continued to gain traction following a strong return with new contestants and upgraded formats.

綜藝節目方面，《奇葩說》第五季強勢回歸，新選手、升級賽制持續升溫。

During the fourth quarter, we also released a series of young-oriented shows that target younger generation of audiences.

第四季度，我們也推出了一系列針對年輕一代觀眾的年輕節目。

The Chinese Youth, a music show that incorporates traditional Chinese cultural elements broke a new ground; I, Actor, a show about training young acting talent also became very popular and helped to beef up the supply of potential actors and actresses in our original content.

融合中國傳統文化元素的音樂節目《中國少年》開啟了新天地； 《我，演員》一檔培養年輕表演人才的節目也很受歡迎，這有助於增加我們原創內容中潛在演員的供應。

Movies remain a critical component of our content ecosystem and have been driving subscriber growth and retention.

電影仍然是我們內容生態系統的重要組成部分，並一直在推動訂閱者的成長和保留。

Our curated movie procurement strategy has allowed an increasing number of movies to become available on our platform shortly after their theatrical release.

我們精心策劃的電影採購策略使越來越多的電影在院線上映後不久就可以在我們的平台上觀看。

At the same time, we are working with hundreds of content providers who develop high-quality Internet movies for our platform under our revenue-sharing model.

同時，我們正在與數百家內容供應商合作，他們在我們的收入共享模式下為我們的平台開發高品質的網路電影。

In terms of content development, I'm pleased with the progress we made in 2018.

在內容開發方面，我對我們 2018 年的進展感到滿意。

Our overall content library is expanding rapidly in breadth and depth.

我們的整體內容庫在廣度和深度上正在迅速擴展。

We continue to enhance our production capabilities for original content and streamline our IP value chain.

我們持續提升原創內容製作能力，精簡IP價值鏈。

Our original iconic drama, The Story of Yanxi Palace, recently entered the spotlight again as it ranked the most Googled drama series globally in 2018.

我們的原創經典劇《延禧攻略》最近再次成為人們關注的焦點，它成為 2018 年全球 Google 搜尋次數最多的劇集。

Thanks to the popular digital novel of same name, our iQIYI Reading app ranked among the Top 10 mobile apps with the fastest-growing user base in 2018 according to QuestMobile.

由於同名熱門數位小說，我們的愛奇藝閱讀應用程式躋身 QuestMobile 2018 年用戶基數成長最快的十大行動應用程式之列。

We are also leveraging successful IP from our video content to develop mobile games and other forms of entertainment.

我們也利用影片內容中的成功知識產權來開發手機遊戲和其他形式的娛樂。

In addition, we continue to nurture our ecosystem, and as a result, we're able to empower an expanding group of PGC partners to grow with us.

此外，我們繼續培育我們的生態系統，因此，我們能夠讓越來越多的 PGC 合作夥伴與我們一起成長。

The amount of content contributed by iQIYI Partner Accounts increased significantly from a year ago, and PGC content now accounts for over half of our total traffic in terms of video views.

愛奇藝合作夥伴帳號貢獻的內容量較一年前大幅成長，PGC內容目前已佔影片總播放量的一半以上。

Entering 2019, we kicked off the year with several successful original titles, including our original drama series, Beauty Haolan, and the self-produced variety shows, Idol Producer 2. For the rest of the year, we have a strong portfolio of content lined up, including original drama series, The Golden Eyes, Sword Dynasty, Season 2 of Tientsin Mystic, The Thunder, Zhaoge and then the Legend of White Snake, among others.

進入2019年，我們以幾部成功的原創作品拉開了這一年的序幕，包括我們的原創電視劇《美麗浩藍》和自製綜藝節目《偶像練習生2》。在今年剩下的時間裡，我們擁有強大的內容組合包括原創電視劇《黃金瞳》、《劍王朝》、《天津神探第二季》、《雷霆》、《朝歌》、《白蛇傳》等。

We also have new seasons of various self-produced variety shows such as The Rap of China, set for release.

我們還有《中國新饒舌》等各類自製綜藝節目新一季即將推出。

Last but not least, I'd like to briefly talk about our technology development.

最後，我想簡單談談我們的技術發展。

As a technology-based entertainment company, we apply innovative AI technology to every part of our organization to drive business growth.

作為一家以科技為基礎的娛樂公司，我們將創新的人工智慧技術應用於組織的每個部分，以推動業務成長。

We continued to enhance our network infrastructure, app matrix, social community as well as content distribution and the monetization efficiency.

我們持續增強網路基礎架構、應用矩陣、社交社群以及內容分發和變現效率。

We also made numerous efforts to incubate new products and services to better serve our users and partners.

我們也付出了大量努力來孵化新產品和服務，以更好地服務我們的用戶和合作夥伴。

In late November, we again partnered with Baidu as well as Sichuan Cable TV to jointly launch the Shu Little Fruit Set Top Box.

11月下旬，我們再次與百度、四川有線電視合作，共同推出蜀小果機上盒。

This was the second AI-based TV box after Gehua Little Fruit, our ground-breaking MVPD plus VOD partnership with Beijing Gehua CATV Network earlier the last year.

這是繼去年早些時候我們與北京歌華有線電視網絡建立突破性的 MVPD + VOD 合作夥伴歌華小果之後的第二款基於人工智慧的電視盒。

Both set-top boxes incorporate iQIYI's HomeAI solution that brings users a smarter home entertainment experience such as voice control and facial recognition.

這兩款機上盒均採用了愛奇藝的HomeAI解決方案，為用戶帶來語音控制、臉部辨識等更智慧的家庭娛樂體驗。

Another exciting area for us is our Cutting-edge ZoomAI technology, which integrates a holistic set of solutions to enhance image and video quality with AI technologies.

另一個令我們興奮的領域是我們的尖端 ZoomAI 技術，它整合了一整套解決方案，透過人工智慧技術增強影像和視訊品質。

It also increases the frame rate of videos from 25fps per second to 50fps through intelligent frames interpolation, which is invaluable for scenes with rapid movements such as sports content.

它還透過智慧幀插值將影片的幀速率從每秒 25 fps 提高到 50 fps，這對於體育內容等快速運動的場景來說非常寶貴。

ZoomAI's unique image in painting algorithm can also be deployed to restore some classic TV drama content that were produced decades ago.

ZoomAI獨特的畫演算法還可以用來還原一些幾十年前製作的經典電視劇內容。

It only takes ZoomAI 6 to 8 hours to fix a 2-hour long video, which would otherwise have taken approximately 10 people 20 working days to finish.

ZoomAI只需要6到8個小時就能修復一個2小時長的視頻，否則需要大約10個人20個工作天才能完成。

iQIYI's ZoomAI was recently awarded the Excellent Technical Award at the ChinaMM 2018.

近日，愛奇藝ZoomAI榮獲ChinaMM 2018優秀技術獎。

In conclusion, 2018 was a fruitful year for us as we reached many milestones.

總之，2018 年對我們來說是碩果累累的一年，我們實現了許多里程碑。

Our IPO early last year introduced us as a public company and elevated our brand and platform; our comprehensive portfolio of content continues to excel.

去年年初，我們進行了首次公開募股，使我們成為一家上市公司，並提升了我們的品牌和平台；我們全面的內容組合持續表現出色。

Our subscriber numbers constantly hit new highs; and our revenues continued to scale and diversify.

我們的訂閱人數不斷創新高；我們的收入繼續擴大規模和多樣化。

2018 was also a transition year for us.

2018年對我們來說也是一個轉型的一年。

As we shifted more resources towards producing original content, we believe it will help us build a stronger platform and IP powerhouse over the long term.

隨著我們將更多資源轉向原創內容製作，我們相信從長遠來看，這將有助於我們建立更強大的平台和智慧財產權強國。

Looking out in 2019, we are more confident than ever in our business prospects.

展望2019年，我們對業務前景比以往更有信心。

And with that, I will now pass the call to Xiaodong to go over our financials.

現在，我將把電話轉給曉東，詢問我們的財務狀況。

Good morning, everyone.

大家，早安。

Let me go through our financial highlights.

讓我回顧一下我們的財務亮點。

Starting on January 1, 2018, iQIYI adopted ASC 606, a new revenue accounting standard that nets VAT from the revenue and cost of revenue line items.

自2018年1月1日起，愛奇藝採用了新的收入會計準則ASC 606，該準則從收入和收入項目的成本中扣除增值稅。

To increase comparability with 2018 numbers, 2017 numbers for today's discussion have been adjusted net of VAT.

為了提高與 2018 年數據的可比性，今天討論的 2017 年數據已扣除增值稅。

For the fourth quarter of 2018, iQIYI's total revenues was RMB 7 billion, up 55% year-over-year.

2018年第四季，愛奇藝總營收為70億元人民幣，較去年同期成長55%。

Total revenues in 2018 reached RMB 25 billion, up 52% year-over-year.

2018年總營收達250億元人民幣，較去年同期成長52%。

The increase was primarily driven by strong growth of our membership service, thanks to our premium content, especially, our original content titles as well as our various operational initiatives.

這一成長主要是由我們的會員服務的強勁成長所推動的，這要歸功於我們的優質內容，特別是我們的原創內容標題以及我們的各種營運舉措。

Membership services revenue for the fourth quarter was RMB 3.2 billion, up 76% year-over-year.

第四季會員服務收入為人民幣32億元，較去年成長76%。

Membership services revenue in 2018 were RMB 10.6 billion, up 72% year-over-year.

2018年會員服務收入為人民幣106億元，較去年成長72%。

This was driven by the strong growth in the number of subscribers, which reached 87.4 million at the end of 2018.

這是由於訂閱者數量強勁增長推動的，截至 2018 年底訂戶數量達到 8,740 萬。

Online advertising services revenue for the fourth quarter were RMB 2.2 billion, up 9% year-over-year, primarily attributable for the growth of brand advertising business.

第四季網路廣告服務營收為人民幣22億元，較去年成長9%，主要得益於品牌廣告業務的成長。

Online advertising services revenue in 2018 was RMB 9.3 billion, up 21% year-over-year, primarily driven by our innovative advertising solutions and the high-quality content offerings, especially our original content.

2018年線上廣告服務收入為人民幣93億元，年增21%，主要得益於我們創新的廣告解決方案和高品質的內容產品，特別是我們的原創內容。

Content distribution revenue for the fourth quarter was RMB 522 million, up 137% year-over-year.

第四季內容分發收入為人民幣5.22億元，較去年同期成長137%。

Content distribution revenue in 2018 were RMB 2.2 billion, up 92% year-over-year.

2018年內容發行收入為人民幣22億元，較去年同期成長92%。

The increase were driven by a number of premium content titles we distributed.

這一增長是由我們發行的一些優質內容所推動的。

Other revenues for the fourth quarter were RMB 1.1 billion, up to 129% year-over-year.

第四季其他收入為人民幣11億元，較去年成長129%。

Other revenues in 2018 was RMB 2.9 billion, up 105% from year 2017.

2018年其他收入為人民幣29億元，較2017年成長105%。

The increase was driven by strong performance across various business lines.

這一成長是由各業務線的強勁業績所推動的。

Moving on to the cost of revenues.

繼續討論收入成本。

Our cost of revenues for the fourth quarter was RMB 8.5 billion, up 100% year-over-year.

我們第四季的營收成本為人民幣85億元，年增100%。

Cost of revenues in 2018 was RMB 27.1 billion, up 65% from year 2017.

2018年營收成本為人民幣271億元，較2017年成長65%。

The increase was primarily driven by higher content cost as we persist in our original content strategy to build our comprehensive content library.

這一增長主要是由於我們堅持原創內容策略來建立全面的內容庫，因此內容成本上升。

Content costs were RMB 6.5 billion for the fourth quarter and RMB 21.1 billion for the year of 2018, up 97% and 67% on a year-over-year basis, respectively.

2018年第四季和全年內容成本分別為65億元人民幣和211億元人民幣，較去年同期分別成長97%和67%。

Turning to the operating expenses.

轉向營運費用。

SG&A expense in the fourth quarter were RMB 1.2 billion, up 58% year-over-year.

第四季銷售管理及行政費用為人民幣12億元，較去年同期成長58%。

SG&A expense in 2018 were RMB 4.2 billion, up 56% from year 2017.

2018 年銷售管理及行政費用為 42 億元，較 2017 年成長 56%。

The increase was primarily due to the increased marketing spending on the channel coverage and the content-related promotion as well as increased share-based compensation expenses.

這一增長主要是由於通路覆蓋和內容相關促銷的營銷支出增加以及基於股權的薪酬支出增加。

Our R&D expenses in the fourth quarter were RMB 607.5 million, up 67% year-over-year.

第四季研發費用為人民幣6.075億元，年增67%。

Research and development expense in 2018 were RMB 2 billion, up 57% from year 2017.

2018年研發費用為20億元人民幣，較2017年成長57%。

The increase was primarily due to our continuous investment in R&D people.

這項成長主要得益於我們對研發人員的持續投入。

Operating loss in the fourth quarter was RMB 3.3 billion compared with operating loss of RMB 856.1 million in the same period of 2017.

第四季營運虧損為人民幣33億元，而2017年同期營運虧損為人民幣8.561億元。

The operating loss margin for the fourth quarter was 47% compared to the operating loss margin of 19% in the same period of 2017.

第四季的營運虧損率為47%，而2017年同期的營運虧損率為19%。

Operating loss in 2018 was RMB 8.3 billion compared to the operating loss of RMB 4 billion in 2017.

2018年經營虧損為人民幣83億元，而2017年經營虧損為人民幣40億元。

Operating loss margin in 2018 was 33% compared to operating loss margin of 24% in year '17.

2018 年的營業虧損率為 33%，而 17 年的營業虧損率為 24%。

Total other expense in the fourth quarter were RMB 34.8 million compared with total other income of RMB 233.8 million during the same period of 2017.

第四季度其他支出總額為人民幣 3,480 萬元，而 2017 年同期其他收入總額為 2.338 億元。

Total other expense in 2018 were RMB 676.2 million compared to total other income of RMB 208.5 million during 2017.

2018 年其他支出總額為 6.762 億元，而 2017 年其他收入總額為 2.085 億元。

The full year variance mainly came from the foreign exchange loss and gain we recognized in year 2018 and the year 2017, respectively.

全年差異主要來自於我們分別於2018年和2017年確認的匯兌損失和收益。

The remaining variance was related to lower interest expense and the higher interest income as a result of our IPO and other financing activities in the year 2018 as well as the recognition of fair value gain arising from our private company equity investments.

其餘差異與 2018 年我們的 IPO 和其他融資活動導致的利息支出減少和利息收入增加以及確認我們的私人公司股權投資產生的公允價值收益有關。

Loss before income tax for the fourth quarter was RMB 3.4 billion compared with a loss of RMB 622.3 million during the same period of 2017.

第四季所得稅前虧損為人民幣34億元，而2017年同期虧損為人民幣6.223億元。

Loss before income tax in year 2018 was RMB 9 billion compared to a loss of RMB 3.7 billion in year 2017.

2018 年所得稅前虧損為人民幣 90 億元，而 2017 年為虧損 37 億元。

Income tax expense for the fourth quarter was RMB 79.5 million compared to an income tax benefit of RMB 9.9 million in the same period in 2017.

第四季所得稅費用為 7,950 萬元，而 2017 年同期所得稅收益為 990 萬元。

Income tax expense in the year 2018 was RMB 78.8 million compared to income tax benefit of RMB 7.6 million in year 2017.

2018 年所得稅費用為 7,880 萬元，而 2017 年所得稅優惠為 760 萬元。

Net loss attributable for iQIYI for the fourth quarter was RMB 3.5 billion compared with a loss of RMB 612.4 million during the same period of 2017.

第四季愛奇藝應佔淨虧損為人民幣35億元，而2017年同期則為虧損人民幣6.124億元。

Diluted net loss attributable to iQIYI per ADS for the fourth quarter was RMB 4.83.

第四季每股美國存託憑證攤薄後歸屬於愛奇藝的淨虧損為人民幣4.83元。

Net loss attributable to iQIYI in 2018 was RMB 9.1 billion compared to a loss of RMB 3.7 billion in year 2017.

2018年愛奇藝應佔淨虧損為人民幣91億元，2017年則為虧損人民幣37億元。

Diluted net loss attributable to iQIYI per ADS was RMB 17.01 for year 2018.

2018 年每股美國存託股攤薄後歸屬於愛奇藝的淨虧損為人民幣 17.01 元。

As of December 31, 2018, the company had cash, cash equivalents, restricted cash and short-term investments of RMB 12.8 billion.

截至2018年12月31日，本公司擁有現金、現金等價物、限制性現金及短期投資128億元。

In December, we closed the offering of USD 750 million in aggregate principal amount of convertible senior notes as part of our efforts to diversify our financing options and the investor base.

12 月，我們完成了本金總額為 7.5 億美元的可轉換優先票據的發行，作為我們實現融資選擇和投資者基礎多元化努力的一部分。

Heading for the first quarter 2019 guidance, we expect total revenue to between RMB 6.8 billion and RMB 7.1 billion, representing an increase of 40% to 46% year-over-year.

展望2019年第一季指引，我們預期總營收將在人民幣68億元至人民幣71億元之間，年增40%至46%。

This forecast reflects iQIYI's current and preliminary view, subject to change.

該預測反映了愛奇藝目前的初步觀點，可能會改變。

This concludes our prepared remarks.

我們準備好的演講到此結束。

I will now turn the call to the operator and now open for Q&A.

我現在將電話轉給接線員並開始問答。

(Operator Instructions) Your first question comes from the line of Thomas Chong from Credit Suisse.

（操作員說明） 您的第一個問題來自瑞士信貸銀行的 Thomas Chong。

My question is about the 2019 outlook.

我的問題是關於2019年的展望。

Given that we see our subscribers is growing very well, just want to see how we should think about the subscribers growth as well as other business segments like advertising, content distribution and others, because we see content distribution and others also performing very well as well as the trend in content costs.

鑑於我們看到我們的訂戶成長得非常好，只是想看看我們應該如何考慮訂戶成長以及廣告、內容分發等其他業務部門，因為我們看到內容分發和其他業務部門也表現得很好作為內容成本的趨勢。

This is Gong Yu.

這是龔宇。

(foreign language)

（外語）

I will first start from the revenue side.

我先從收入方面開始。

We remain optimistic about the membership business in 2019.

我們對2019年的會員業務保持樂觀。

We would like to reiterate that we think the net additions in this year will be pretty much similar as the net additions we achieved in year '18.

我們想重申，我們認為今年的淨增量將與我們 18 年實現的淨增量非常相似。

I think there are 2 major drivers behind that.

我認為這背後有兩個主要驅動因素。

One, is we are producing more and more original content.

一是我們正在製作越來越多的原創內容。

And not only the quantity is increasing but also the quality is improving that drives a lot of free users to become paying subscribers.

不僅數量在增加，品質也在提高，促使大量免費用戶變成付費用戶。

And secondly, overall, the Chinese Internet users are getting used to the paying habit and they are more appreciating the premium content that the entertainment, it shows to them, so it's very common for them to become -- get used to the paying habit.

其次，整體而言，中國網路使用者正在習慣付費習慣，他們更欣賞娛樂節目向他們展示的優質內容，因此他們習慣付費習慣是很常見的。

And secondly on the advertising side, we are cautiously optimistic about advertising business.

其次在廣告方面，我們對廣告業務持謹慎樂觀的態度。

Start with brand advertising because brand advertising is the majority of our advertising revenue, and infeed, is a small part of the advertising.

從品牌廣告開始，因為品牌廣告占我們廣告收入的大部分，而資訊流只佔廣告的一小部分。

On the brand side, we believe we will keep -- slice -- more market share from the TV advertising side because advertisers are keeping shifting their budgets towards the video platform.

在品牌方面，我們相信我們將在電視廣告方面保留更多的市場份額，因為廣告商不斷將預算轉向視訊平台。

However, because of the macro headwinds and the facts that you are all aware of, we think that the growth rate will not be as high as the previous years.

然而，由於宏觀阻力和大家都知道的事實，我們認為成長率不會像前幾年那麼高。

That's for brand ads.

那是品牌廣告。

For the in-feed ads, we have 2 major observations.

對於資訊流廣告，我們有兩個主要觀察。

One, is we think the industry-wide, the supply of inventory is growing.

一是我們認為整個產業的庫存供應正在成長。

And on the other hand, the feeding demand is not growing that much.

另一方面，飼料需求卻沒有增加那麼多。

So there is a potential pressure for the feeding price.

因此，飼料價格有潛在壓力。

And secondly, as we mentioned before, we are doing some cleaning up for our own in-feed advertisers because of the -- there are more risky profile of unhealthy advertisements, so we did that in last quarter and also this quarter.

其次，正如我們之前提到的，我們正在為我們自己的資訊流廣告商進行一些清理工作，因為不健康的廣告風險更大，所以我們在上個季度和本季都這樣做了。

So overall, we are cautiously optimistic about advertising.

所以整體來說，我們對廣告持謹慎樂觀的態度。

On the content side, we have already saw that since August last year, the -- both the procurement price, or you say that license price as well as the production cost are both coming down.

在內容方面，我們已經看到，從去年8月開始，無論是採購價格，或是你說的授權價格，還是製作成本都在下降。

I mean, the selling price.

我的意思是，售價。

To give you an example, previously, the highest license price for a single episode would be as high as RMB 15 million per episode.

舉個例子，此前，單集授權價格最高可達每集1,500萬元。

Now since -- after August last year, it's come down to around RMB 8 million per episode.

現在從去年8月以後，已經降到每集800萬元左右了。

On the self-produced side, we also benefit from the capped salary regulation for actors.

在自製方面，我們也受益於演員的薪資上限規定。

Previously, some very A-list actor or actress can charge as high as RMB 150 million for a show.

此前，一些非常一線的演員一場戲的片酬高達1.5億元人民幣。

But now the cap is only RMB 15 million.

但現在上限只有1500萬元。

So that gives us the confidence that the both licensed content as well as self-produced content cost will come down in the future.

因此，這讓我們有信心未來授權內容和自製內容的成本都會下降。

Why we say in the future?

為什麼我們說未來呢？

It's because the licensed content, there will be a time lag of 6 to 12 months between the contract was signed to a content can actually come online.

這是因為許可內容，從簽訂合約到內容可以實際上線之間會有6到12個月的時間延遲。

And for self-produced contents are actually taking longer to -- as long as 12 to 18 months before that -- those impacts can heal our P&L.

對於自製內容來說，實際上需要更長的時間（長達 12 到 18 個月）才能治癒我們的損益。

Your next question comes from the line of Eddie Leung of Merrill Lynch.

你的下一個問題來自美林證券的埃迪·梁（Eddie Leung）。

Just a follow-up question on your comment about content spending.

只是關於您對內容支出的評論的後續問題。

So as the market content costs coming down, how would that affect your strategy in content purchases?

那麼，隨著市場內容成本的下降，這將如何影響您的內容購買策略？

Would you have more saving or increased volume of contents to be purchased than produced?

您購買的內容會比製作的內容節省更多或增加數量嗎？

And then just a quick question on the subscription business.

然後是關於訂閱業務的一個簡單問題。

Could you comment on the retention rate you have seen in recent quarter or 2 given the faster growth and accelerating growth of your subscriber number this -- in 2018?

鑑於 2018 年您的訂戶數量增長更快，您能否對最近一兩個季度的保留率發表評論？

Dr. Gong Yu will comment on the first question.

龔宇博士就第一個問題進行評論。

This is Xiaodong.

這是曉東。

I will answer your second one.

我來回答你的第二個問題。

And the churn rate of subscription business remain in, I think, almost the same as the previous ones.

我認為訂閱業務的流失率幾乎與以前相同。

I think, slight improvement we can see that.

我認為，我們可以看到輕微的改進。

And so I don't think the increase on the subscriber base has anything, I'd say, negative impact on the churn rate.

因此，我認為用戶群的增加不會對客戶流失率產生任何負面影響。

(foreign language)

（外語）

For the content purchased, actually, most of the content we plan for 2019 was -- the ballpark was already purchased in year '18.

對於購買的內容，實際上，我們 2019 年計劃的大部分內容是——球場在 18 年就已經購買了。

So -- and actually, the licensed content is pretty much saturated in 2018.

因此，實際上，2018 年授權內容幾乎已經飽和。

So now we are planning for 2020.

所以現在我們正在計劃2020年。

That means the purchase volume in 2019 will not grow that much in this year versus 2018.

這意味著2019年的採購量與2018年相比不會成長那麼多。

And you are looking beyond -- if you're looking at the purchase volume of 2020 versus 2019, we actually are citing a slight decrease in volume for the purchased content.

如果你看的是 2020 年與 2019 年的購買量，我們實際上發現購買內容的數量略有下降。

On the self-produced or the original content, on the other hand, we are seeing very clear obvious increase in volume in year '18 versus '17.

另一方面，在自製或原創內容方面，我們看到 18 年與 17 年相比，數量有非常明顯的增長。

And if you look at this year versus last year or even year 2020 versus 2019, now trend will continue to increase because this is our strategy direction for us.

如果你比較今年與去年，甚至 2020 年與 2019 年的情況，現在的趨勢將繼續增加，因為這是我們的策略方向。

Your next question comes from the line of Ella Ji from China Renaissance.

您的下一個問題來自華興資本的Ella Ji。

First, I wanted to follow up with the discussion of content cost.

首先，我想跟進內容成本的討論。

Can we just talk about that on a cash flow basis instead of on a P&L basis?

我們可以只在現金流的基礎上而不是在損益的基礎上討論這個問題嗎？

So on cash flow basis, if the total purchased content volume may go down moderately and the unit price is also going down, shall we expect the cash flow spending for content in 2019 will be much smaller than 2018?

那麼從現金流的角度來看，如果內容購買總量適度下降，單價也下降，那麼2019年的內容現金流支出是否會比2018年小很多呢？

And then secondarily, yes, just quickly on the -- regarding the regulation -- regulatory environment.

其次，是的，很快就有關監管的監管環境。

So I wonder if Dr. Gong can further comment on the -- currently, we understand that the entire entertainment industry sort of slowed down dramatically because of stronger regulation, also the celebrity pay ceiling.

所以我想知道龔博士是否可以進一步評論一下——目前，我們了解到，由於更嚴格的監管以及名人的薪資上限，整個娛樂產業的發展速度急劇放緩。

So Dr. Gong, do you expect this will be a temporary situation or do you think that this will likely be a structural change?

那麼龔博士，您認為這將是暫時的情況還是可能是結構性的變化？

This is Xiaodong and I will answer the first question and then Dr. Gong will comment on the second one.

我是曉東，我回答第一個問題，然後龔醫師評論第二個問題。

So you're right.

所以你是對的。

On the licensed content, definitely, you will see some improvement on the cash flow side because the volume, and Dr. Gong just mentioned, in 2020 will decrease and that the price will decrease.

在授權內容方面，毫無疑問，你會看到現金流方面有所改善，因為2020年數量會減少，龔博士剛才提到，價格會下降。

So the cash flow we spend on licensed content side will decrease.

所以我們花在授權內容的現金流將會減少。

However, this doesn't necessarily mean the total cash flow and our total content cost will improve a lot because as we discussed before, as we increase the percentage of our original content, actually, the cash flow will deteriorate, because you have to pay up-front for all the original content because nobody else will pay for that.

然而，這並不一定意味著總現金流和我們的總內容成本會改善很多，因為正如我們之前討論的，當我們增加原創內容的百分比時，實際上現金流會惡化，因為你必須付費所有原始內容的預付費用，因為沒有其他人會為此付費。

So in all, I would expect probably a slight improvement on major ones.

總而言之，我預計主要問題可能會略有改善。

So I don't think any material improvement on the cash flow side.

所以我認為現金流方面沒有任何實質改善。

And before Dr. Gong will comment on the second question, I just want to remind you guys, let's stick to the one question-only, otherwise, we'll run out of time.

在龔醫師評論第二個問題之前，我想提醒大家，我們只討論第一個問題，否則，我們的時間就不夠了。

So please.

所以，請。

(foreign language)

（外語）

Actually, there are 3 major regulatory changes in the past several months.

事實上，過去幾個月發生了3項重大監管變化。

Number one, is before the all contents aired on the video platform, the platform will be responsible to getting the necessary permission and license for those.

第一，所有內容在視訊平台上播出之前，平台將負責取得必要的許可和許可。

And now, it turns out to change to the content producers who need to apply those permissions themselves.

現在，情況發生了變化，內容製作者需要自己申請這些權限。

We don't think that has much impact on us because from now on, we will only be responsible for the permission for the content iQIYI produced -- original produced, so we will not be responsible for the CP's content permission.

我們認為這對我們影響不大，因為從現在開始，我們只負責愛奇藝出品的內容的許可——原創，所以我們不會負責CP的內容許可。

And secondly, there's new rule that for the content that was released on the video platform as the first window content, those contents need to, not only get a provincial permission, but also need a central government permission for those content.

其次，新的規定是，對於在視訊平台作為第一窗口內容發布的內容，這些內容不僅需要獲得省級許可，還需要中央政府的許可。

So that has some impact on us because -- on the industry broadly because that will take longer time, firstly, and then maybe the central bureau is more strict than the provincial bureau and some part of the content might be deleted or adjusted, that's the impact.

所以這對我們有一些影響，因為——對整個行業來說，因為這需要更長的時間，首先，然後可能中央局比省局更嚴格，某些內容可能會被刪除或調整，這就是影響。

But the impact is very limited.

但影響非常有限。

And thirdly, there is some new rules on short-form video content.

第三，對於短視訊內容有一些新的規定。

That mainly affect the short-form video players.

這主要影響短視頻播放器。

We only have limited exposure to the short videos, so that is impact on us is also limited.

我們對短影片的接觸有限，所以對我們的影響也有限。

For the question you asked about the cap payment, the ceiling of the payment to celebrities, I think that's very positive for the long-term development for the industry because although the number, RMB 15 million cap, that we -- I talked just now, that's only a joint declaration between us and 3 major platforms and 6 major production companies, that's not actually the government enforcement rules.

對於你問的關於支付上限的問題，即向名人支付的上限，我認為這對於行業的長期發展是非常積極的，因為儘管我們剛才談到了1500萬人民幣的上限。 ，那隻是我們和3大平台、 6大製作公司的聯合聲明，這其實並不是政府的執行規則。

However, that already -- that's a very widely accepted practice for the industry.

然而，這已經是業界廣泛接受的做法。

As far as I know, there haven't been any violation of that since last summer.

據我所知，自去年夏天以來，還沒有發生任何違規行為。

So I think that will be a very positive sign, and it makes both younger actors and actress to stand out from the old and very established actors and actress.

所以我認為這將是一個非常積極的信號，它使年輕的演員從老牌演員中脫穎而出。

And it's also such a benchmark effect for those older actors because they cannot afford to not appearing on TV or on our view platform for more than 1 year.

對於那些年長的演員來說，這也是一個標竿效應，因為他們不能承受超過一年不出現在電視或我們的觀看平台上的後果。

So they will gladly accept the roles as well.

所以他們也會很樂意接受這些角色。

I think those will be very positive for the industry and will be a sustainable trend going forward because that's more rational for the market, it's more fitting for the market condition.

我認為這對該行業來說是非常積極的，並且將是未來可持續的趨勢，因為這對市場來說更加理性，更適合市場狀況。

(foreign language)

（外語）

The licensed content -- the volume of license content has increased dramatically in 2017 to 2018 because the supply is very big.

許可內容－2017年至2018年許可內容的數量急劇增加，因為供應量非常大。

And now we have a content list of more than 100 dramas on our list, so I think the supply is very sufficient.

而且現在我們的名單上有100多部劇的內容清單，所以我認為供應是非常充足的。

And even in latter half of 2018, we didn't see any decrease of that supply.

即使在 2018 年下半年，我們也沒有看到供應量有任何減少。

And your next question comes from the line of Alicia Yap of Citigroup.

你的下一個問題來自花旗集團的 Alicia Yap。

I have a question on the advertising.

我有一個關於廣告的問題。

So reading your advertising revenue, what is the rough percentage of contribution coming from the creative ad solutions that are pre-committed by the advertiser for your self-produced content?

那麼從你的廣告收入來看，廣告主為你自製的內容預先承諾的創意廣告解決方案的貢獻比例大約是多少？

So if we exclude this creative ad solution, what could be the growth rate for the traditional pre-roll ad revenue for this quarter over the past couple of quarters?

那麼，如果我們排除這種創意廣告解決方案，本季傳統前貼片廣告收入較過去幾季的成長率可能是多少？

This is Xiaodong.

這是曉東。

I think for those innovative advertising solutions, and as we've said, over 50% of ads revenue for our original content, as for licensed content, because it's very difficult for us to embed those innovative solution in the like say content produced by third party, so basically, as you already know, the licensed content still account for the majority of the total content library.

我認為對於那些創新的廣告解決方案，正如我們所說，超過 50% 的廣告收入來自我們的原創內容，至於許可內容，因為我們很難將這些創新解決方案嵌入到第三方製作的內容中所以基本上，如您所知，授權內容仍然佔內容庫總量的大部分。

So it's not that big, but in some, like, quarter, it varies from quarter-to-quarter.

所以它並沒有那麼大，但在某些方面，例如季度，它會因季度而異。

For example, in some quarter, we released 1 or 2 hit variety shows, that will give us like the jump of the package you asked.

例如，在某個季度，我們發布了1或2個熱門綜藝節目，這會為我們帶來像您要求的套餐的跳躍。

So I just, okay, only give you a wide range.

所以我只是，好吧，只給你一個廣泛的範圍。

I think those innovative ad solutions accounts for, let's say, 20% to 40% of the total ads revenue.

我認為這些創新的廣告解決方案佔廣告總收入的 20% 到 40%。

That's just a rough range because it just varies from quarter-to-quarter.

這只是一個粗略的範圍，因為它只是隨季度而變化。

And...

和...

So the next question comes from the line of Binnie Wong from HSBC.

那麼下一個問題來自匯豐銀行的 Binnie Wong。

So my question is on the advertising revenue growth.

所以我的問題是關於廣告收入的成長。

If you look at the nice growth, the strong growth in the membership services, of course, that proves the -- our premium content is actually one of the industry-leading and industry best, right?

如果你看看會員服務的良好成長和強勁成長，當然，這證明了——我們的優質內容實際上是業界領先和行業最佳的內容之一，對嗎？

But how come, like, if you look at the advertising revenue growth, we can see a sequential decline.

但為什麼呢，如果你看看廣告收入的成長，我們可以看到連續下降。

So besides the macro reasons, is there any way that, in 2019, that we will be put -- when we put, like, the sponsorship, the advertising solutions, we will, in advance, be able to raise our pricing?

那麼，除了宏觀原因之外，在 2019 年，當我們投入贊助、廣告解決方案時，是否有任何方法可以提前提高我們的定價？

So it's like the success of Yanxi Palace, right, that it hasn't been entirely fully been able to capture it in our stronger advertising growth.

所以就像《延禧攻略》的成功一樣，它還沒有完全能夠在我們更強勁的廣告成長中捕捉到它。

So in 2019, people -- management has really talked about (foreign language) recruiting the advertisers.

所以在 2019 年，人們——管理層確實談論了（外語）招募廣告商。

So how are we seeing any modification changes so we could ensure that we can capture more of the upside when the drama series has been practically doing well?

那麼，當電視劇實際上表現良好時，我們如何看待任何修改，以便確保我們能夠捕捉到更多的好處？

Okay, it's a very long question.

好吧，這是一個很長的問題。

I think of it as a long matter in the press release.

我認為這是新聞稿中的一個很長的問題。

So let me just probably clarify.

讓我大概澄清一下。

First, I think the one major reason for the big partners' crucial decline for ads business is not only due to the macro environment.

首先，我認為大合作夥伴廣告業務大幅下滑的一個主要原因不僅僅是宏觀環境。

Actually, it has mainly come from the seasonality.

其實，主要是來自季節性。

The fourth quarter typically is like a slow season compared to the peak season of third quarter.

與第三季的旺季相比，第四季通常是淡季。

And then you also mentioned limited, I'd say, hot content.

然後你也提到了有限的熱門內容。

Actually you are right, Yanxi Palace is like -- is content for the subscribers.

其實你是對的，《延禧攻略》就像是──為訂閱者提供的內容。

So we did reflect some as revenue, but there is another primary purpose for that.

因此，我們確實將一些反映為收入，但還有另一個主要目的。

So it's maybe a wrong example, but you're right, definitely, we try to capture all the opportunities for those legacy and, say, hot content or whatever.

所以這可能是個錯誤的例子，但你是對的，當然，我們試圖抓住這些遺產的所有機會，例如熱門內容或其他什麼。

So basically, I think the innovative ad solution is a key driver for our brand advertisement in the next few years.

所以基本上，我認為創新的廣告解決方案是未來幾年我們品牌廣告的關鍵驅動力。

That's the only, we think, to outperform the general level of the market.

我們認為，這是唯一跑贏市場整體水準的方法。

So basically, we still believe if we're consisting our new content, we'll have more like simplicity than complexity to putting more innovative ads, they will have to continue to grow the branding advertisement.

所以基本上，我們仍然相信，如果我們要組成新內容，我們將更加簡單而不是複雜地放置更多創新廣告，他們將不得不繼續發展品牌廣告。

Also, you mentioned something about legacy increases under the house cleaning impact.

此外，您也提到了房屋清潔影響下遺留物增加的問題。

It's not (foreign language), it's (foreign language) and so it's e-commerce related, it's something else.

它不是（外語），它是（外語），所以它與電子商務相關，它是其他東西。

But we can explain later for that category.

但我們可以稍後解釋該類別。

And yes, with these ads, and we expect the recovery will take some time.

是的，有了這些廣告，我們預計恢復需要一些時間。

So basically, I think for the first 2 quarters this year, we will continue to expand the customer base which is very important for this increased ads business.

所以基本上，我認為今年前兩個季度，我們將繼續擴大客戶群，這對於增加廣告業務非常重要。

We hope to expand the customer base to a more diversified and a more healthy one.

我們希望將客戶群擴大到更多元化、更健康。

And that's the general idea, but it will take some time.

這是總體想法，但這需要一些時間。

We expect and maybe to the second half of this year.

我們預計可能會在今年下半年。

(foreign language)

（外語）

I'll move on to the next question.

我將繼續下一個問題。

So the next question comes from the line of Tian Hou of T.H. Capital.

那麼下一個問題來自T.H.的天后之線。首都。

So the question is related to the content cost.

所以問題與內容成本有關。

So one, on the one hand, the purchasing cost on absolute dollar-wise, it seems like, is going to be slower than last year.

因此，一方面，從絕對美元角度來看，採購成本似乎會比去年慢。

On the in-house produced or professionally-produced, the content or self-produced content seems like they're going to go up.

在內部製作或專業製作方面，內容或自製內容似乎會增加。

So I wonder on a percentage base, percentage of revenue, is this percentage is going to be flat with 2019 or slightly down compared with the 2018.

所以我想知道，從百分比基數、收入百分比來看，這個百分比是否會與 2019 年持平，或者與 2018 年相比略有下降。

And also regarding the member payment, so we do see some competition in the market.

還有關於會員付費，所以我們確實看到市場上有一些競爭。

So do you see the trend of the member payment on an average basis slightly going down?

那麼您認為會員平均付費的趨勢是否略有下降？

What the trend is going to be?

趨勢將會是什麼？

That's the question.

這就是問題所在。

Ladies and gentlemen, the speaker is currently experiencing some technical difficulty.

女士們、先生們，發言者目前遇到了一些技術困難。

Please stay on the line while we address the situation.

在我們處理該情況期間，請保持通話。

(Operator Instructions)

（操作員說明）

(technical difficulty)

（技術難度）

We have the speaker back in the room, and you may continue.

我們已將發言者帶回房間，您可以繼續。

Sorry for the inconvenience.

帶來不便敬請諒解。

I'll just try to answer the last question if I heard them correctly.

如果我沒聽錯的話，我會試著回答最後一個問題。

I think the question was sent in 2 parts.

我認為這個問題是分兩部分發送的。

The first one is what's the percentage of let's say -- what's the mix look like between original content and licensed content from a, like, revenue perspective?

第一個問題是，從收入的角度來看，原創內容和授權內容之間的組合是什麼樣的？

And we didn't disclose that number particularly, but I can give you some idea.

我們沒有具體透露這個數字，但我可以給你一些想法。

With said something about the original content account for about, like, 10% of the total content cost versus the licensed content, and that we also said that the monetization -ability for original content is better than the licensed content, so you can roughly -- have a rough idea of the revenue percentage of original content as a percent of total content.

話雖如此，與許可內容相比，原創內容約佔內容總成本的 10%，而且我們還說過，原創內容的貨幣化能力比許可內容更好，因此您可以粗略地 - - 粗略了解原創內容的收入佔總內容的百分比。

And the second one is whether the increase of subscriber has negative trends on the ARPU side because of the competition.

第二個問題是，用戶的增加是否會因為競爭而在ARPU方面出現負面趨勢。

We don't see that trend.

我們沒有看到這種趨勢。

Because actually, I don't think that pricing is the key driver of this business.

因為實際上，我不認為定價是這項業務的關鍵驅動力。

I think the content and user evolution is more important and to develop subscribers.

我認為內容和使用者的進化更重要，發展訂閱者。

So no, we don't see any negative trends on our side.

所以不，我們沒有看到任何負面趨勢。

(foreign language)

（外語）

Dr. Gong would just add some more comments relating to Binnie's previous question.

龔博士只是針對賓尼之前的問題補充一些評論。

We have 2 main categories of self-produced content.

我們的自製內容主要有兩類。

One is variety shows.

一是綜藝節目。

That's for -- mainly for advertising monetization.

那主要是為了廣告貨幣化。

For drama series, previously, we -- the majority also targeted to drive membership growth but not -- less concentrated on the advertising business.

對於電視劇來說，以前，我們（大多數）也致力於推動會員成長，但不太關注廣告業務。

Going forward, when we plan on marketing our self-produced show -- produced drama series, we'll be more balanced, the contribution for both such business and advertising business.

展望未來，當我們計劃行銷我們的自製劇時，我們會更加平衡，對此類業務和廣告業務的貢獻。

The example you talked about, Yanxi Palace, that's not a very balanced example because that show -- the video view, the traffic would really stack up in the second half of the play.

你提到的《延禧攻略》的例子，這不是一個非常平衡的例子，因為那個節目——視頻觀看量、流量真的會在劇的後半段堆積起來。

So advertisers could not previously set a very high target for them before the show was aired.

所以廣告商在節目播出前不可能給他們設定很高的目標。

Your next...

你的下一個...

I think we can take one more question due time limit.

我想我們可以在有限的時間內再回答一個問題。

The final question will come from the line of Karen Chan of Jefferies.

最後一個問題將來自 Jefferies 的 Karen Chan。

So just wondering, very quickly, are we maintaining our full year content cost guidance at 70%-plus as percentage of revenue?

因此，我們很快就想知道，我們是否會將全年內容成本指引維持在收入的 70% 以上？

And also, are we seeing any negative impact, if at all, on scarcity of quality license content when we do procurement as a result of tighter tax inspection on top celebrities in China or top celebrities being much more low-profile than they were previously?

此外，由於中國對頂級名人的稅務檢查更加嚴格，或者頂級名人比以前更加低調，我們在採購時是否會看到對優質許可內容稀缺的任何負面影響（如果有的話）？

We don't provide official guidance for the content cost, but we do give some guidance on the -- in the trends of the content cost in year 2018.

我們不提供內容成本的官方指導，但我們確實就 2018 年內容成本的趨勢提供了一些指導。

We said that the content cost as a percent of revenue should be better than the second half of the year and probably slightly better.

我們說過，內容成本佔收入的百分比應該會比下半年，甚至可能稍微好一點。

So that gives you some rough idea on the range.

這樣您就可以對範圍有一些粗略的了解。

And...

和...

(foreign language)

（外語）

Actually, for our pipeline this year or even next year, we are very -- we have plenty of content lined up with the top celebrities because they are previously signed and we have enough of pipeline of them.

事實上，對於我們今年甚至明年的管道，我們非常——我們有大量與頂級名人相關的內容，因為他們之前已經簽約，而且我們有足夠的管道。

And secondly, if you look at our self-produced content with those new actor and actress limited pay of RMB 15 million, I think 1 or 2 years later, they will already be a new generation of stars.

其次，如果你看我們自製的內容，那些限薪1500萬人民幣的新演員，我想一兩年後，他們已經是新一代的明星了。

So we are very confident in that.

所以我們對此非常有信心。

Ladies and gentlemen, that does conclude our conference for today.

女士們、先生們，今天的會議到此結束。

Thank you for participating, and you may all disconnect.

感謝您的參與，大家可以斷開連線。