iQIYI Inc (IQ) 2024 Q3 法說會逐字稿

Thank you for standing by and welcome to the iQIYI third quarter 2024 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions)

感謝您的耐心等待，歡迎參加愛奇藝 2024 年第三季財報電話會議。所有參與者都處於只聽模式。將進行演示，然後進行問答環節。 （操作員說明）

I would now like to hand the conference over to Ms. Chang You, IR Director of the company. Please go ahead.

現在我請公司IR總監常友女士主持會議。請繼續。

Thank you, operator. Hello everyone and thank you for joining iQIYI’s third quarter 2024 earnings conference call. The company's results were released earlier today and are available on the company's Investor Relations website at ir.iqiyi.com.

謝謝你，接線生。大家好，感謝您參加愛奇藝 2024 年第三季財報電話會議。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 Mr. Yu Gong, our Founder, Director and CEO, Mr. Jun Wang, our CFO, Mr. Xiaohui Wang, our CCO, Chief Content Officer; Mr. Youqiao Duan, Senior Vice President of our Membership Business; Mr. Xianghua Yang, Senior Vice President of Movies and Overseas business; and Mr. Gang Wu, Senior Vice President of Brand Advertising Business.

今天參加電話會議的有我們的創辦人、董事兼執行長宮宇先生，我們的財務長王軍先生，我們的 CCO、首席內容長王曉輝先生；段友橋先生，會員業務資深副總裁；楊向華先生，電影及海外業務資深副總裁；吳剛先生，品牌廣告業務資深副總裁。

Mr. Gong will give a brief overview of the company’s business operations and highlights, followed by Jun, who will go through the financials. After the prepared remarks, the management team will participate in the Q&A session.

龔先生將簡要介紹公司的業務運作和亮點，隨後由君介紹財務狀況。準備好的發言後，管理團隊將參加問答環節。

Before we proceed, please note that the discussion today will contain forward-looking statements, made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Potential risks and uncertainties include, but are not limited to, those outlined in our public filings with the SEC.

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。與我們目前的預期有重大差異。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 statement 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。

I’ll now pass on to Mr. Gong. Please go ahead.

現在請龔先生發言。請繼續。

Hello, everyone, and thank you for joining us today. Throughout our 14-year company history, our ability to reinvent ourselves and innovate has been our core advantage against competitors, and these strategies have remained unchanged for navigating all kinds of challenges. At this moment, we have identified two key trends.

大家好，感謝您今天加入我們。縱觀我們14年的公司歷史，我們重塑自我和創新的能力一直是我們相對於競爭對手的核心優勢，而這些策略始終保持不變，以應對各種挑戰。目前，我們已經確定了兩個關鍵趨勢。

First, consumers become more prudent because of the macro headwind; secondly, consumers now are facing more entertainment options, including the free mini and short dramas, which is growing rapidly.

首先，消費者因宏觀逆風而變得更加謹慎；其次，消費者現在面臨更多的娛樂選擇，其中免費的迷你劇和短劇正在迅速增長。

As always, we hold strong belief that premium long-form videos remain one of the most fundamental and irreplaceable forms of entertainment. Their unique ability to influence a wide audience and provide emotional value is unmatched by any other form of entertainment.

一如既往，我們堅信優質長影片仍然是最基本、不可替代的娛樂形式之一。它們影響廣泛受眾並提供情感價值的獨特能力是任何其他娛樂形式都無法比擬的。

Meanwhile, facing evolving industry and market dynamics, we should proactively reach out to these new opportunities to ensure our long-term, healthy and sustainable growth. That’s why we have been making a series of strategic upgrades.

同時，面對不斷變化的產業和市場動態，我們應該積極主動地抓住這些新機遇，確保我們的長期、健康、永續發展。這就是我們一直在進行一系列策略升級的原因。

Key initiatives include, first, we have optimized the production of dramas, by refining storytelling pacing, plot structure, and character development so as to better match the audience's viewing preference. This will further improve the popularity and bring better returns.

主要措施包括：一是優化影集製作，精進故事節奏、情節結構、角色塑造，更能契合觀眾的觀看喜好。這將進一步提高知名度並帶來更好的回報。

Second, we have been upgrading, and will continue to upgrade our APPs to include mini and short dramas as part of our content offerings. The main iQIYI App will maintain its focus on long-form video content and subscription-based model, complemented by free mini and short dramas and advertising model. In contrast, the upgraded iQIYI Lite App will focus on free mini and short dramas and the advertising model, complemented by long-form videos and subscription model.

其次，我們一直在升級，並將繼續升級我們的應用程序，將迷你劇和短劇作為我們內容的一部分。愛奇藝主應用程式將繼續以長影片內容和訂閱模式為主，輔以免費迷你劇和短劇以及廣告模式。相較之下，升級後的愛奇藝精簡版App將以免費短劇和廣告模式為主，長影片和訂閱模式為輔。

Third, we will increase investment in the acquisition and distribution of mini and short dramas. Fourth, we have optimized our membership product and service system by combating unauthorized password sharing and introducing an attractively priced family account option. The goal is to enhance member conversions and expand the scale of our membership.

第三是加大微短劇收購發行投入。第四，我們優化了會員產品和服務體系，打擊未經授權的密碼共享，並推出價格極具吸引力的家庭帳戶選項。目標是提高會員轉換並擴大會員規模。

And beyond these initiatives, we would apply AI more widely across our ecosystem, expand our presence in overseas markets, and explore possibilities in IP derivatives and offline experiences. We believe these efforts will enhance our revenue and profitability over the long-term.

除了這些措施之外，我們還將在生態系統中更廣泛地應用人工智慧，擴大我們在海外市場的影響力，並探索IP衍生性商品和線下體驗的可能性。我們相信，從長遠來看，這些努力將提高我們的收入和獲利能力。

Now, let’s move on to the details of our core business segment. Starting with mini and short dramas. We are adapting our content strategy and business model to align with evolving market trends and consumer preferences by introducing mini and short dramas into our offerings.

現在，讓我們繼續了解我們核心業務部門的詳細資訊。從迷你劇和短劇開始。我們正在透過在我們的產品中引入迷你劇和短片來調整我們的內容策略和業務模式，以適應不斷變化的市場趨勢和消費者偏好。

Distinct from long-form videos in format, storytelling style, and audience reach, mini and short dramas serve as a great complement to our existing lineup of traditional long-format dramas, movies, and variety shows.

迷你劇和短劇在形式、敘事風格和受眾範圍上與長視頻不同，是對我們現有的傳統長格式戲劇、電影和綜藝節目陣容的很好補充。

Mini dramas feature episodes lasting one to five minutes in vertical format, and short dramas span five to twenty minutes in horizontal format. These shorter formats offer a quicker storytelling pace, cater well to users seeking quick entertainment breaks, and have gained considerable popularity among audiences.

迷你劇的劇集長度為一到五分鐘的垂直格式，短劇的長度為五到二十分鐘的水平格式。這些較短的格式提供了更快的講故事節奏，很好地迎合了尋求快速娛樂休息的用戶，並在觀眾中獲得了相當大的受歡迎。

From a business model perspective, in the future, mini dramas will be available to all members at no extra cost. Non-members will enjoy the free-to-watch mini dramas or choose to pay-per-view to access those exclusive to members.

從商業模式來看，未來微劇將向所有會員免費開放。非會員可以免費觀看迷你劇，也可以選擇按次付費觀看會員專屬的迷你劇。

Short dramas will mirror the approach taken with our long-form content, they are free for members, while non-members will have access to a brief free-to-watch second window. This dual offering caters to diverse viewer demands, while supporting the growth of our subscriber base and expanding our monetization opportunities.

短劇將反映我們對長篇內容採取的方法，它們對會員免費，而非會員將可以進入簡短的免費觀看第二個視窗。這種雙重產品滿足了不同的觀眾需求，同時支持我們用戶群的成長並擴大我們的獲利機會。

Moving on to long-form videos, which are fundamental to our content ecosystem. Starting with the core drama category, we regained the number one position in viewership market share during the quarter, according to Enlightent data. This was driven by the launch of multiple titles that garnered high acclaim from users.

接下來是長視頻，這是我們內容生態系統的基礎。根據Enlightent的數據，從核心劇集類別開始，我們在本季重新奪回了收視市佔率第一的位置。這是由多款遊戲的推出所推動的，這些遊戲獲得了用戶的高度好評。

Notably, the second season of Strange Tales of Tang Dynasty, (spoken in foreign language) became the fourteenth drama to break the iQIYI popularity index score of 10,000. Not only the series’ third season is already in production, this IP has been expanding its influence from online to offline domains, showcasing our success in IP development.

值得注意的是，《奇葩說》第二季（外語版）成為愛奇藝第十四部熱度指數破萬的電視劇。不僅第三季已經在製作中，這個IP的影響力也從線上延伸到線下，展現了我們在IP開發上的成功。

Also, the new release “For the Young Ones (spoken in foreign language) received the highest iQIYI popularity index score among dramas with less than twenty episodes. Other titles such as Interlaced Scenes (spoken in foreign language), Born to be the One (spoken in foreign language), and Wind Direction (spoken in foreign language) were all released to widespread praise.

此外，新劇《致少年們》（外語版）在愛奇藝20集以內的劇集中獲得了最高分。其他作品如《交錯的場景》（外文版）、《生而為一》（外文版）、《風向》（外文版）等均已推出，受到廣泛好評。

While we are proud of our performance in crime and reality drama genres, we recognize certain areas where we could improve. For example, the limited supply of key female-oriented costume dramas in the third quarter impacted hit title-driven members. To this end, we aim to enhance the steady supply in this genre, while also better aligning content genres with optimal broadcasting windows going forward.

雖然我們對自己在犯罪和真人秀類型片中的表現感到自豪，但我們也意​​識到某些方面可以改進。例如，第三季主要女性向古裝劇的供應有限，影響了熱門會員。為此，我們的目標是增強該類型的穩定供應，同時更好地使內容類型與未來的最佳播放視窗保持一致。

For variety shows, our innovative new title, The King of Stand-up Comedy (spoken in foreign language), reinforced our strong presence in the comedy genre. According to Enlightent data, it dominated the viewership charts for ten consecutive weeks and largely outperformed other shows in the same genre.

在綜藝節目方面，我們創新的新標題《單口喜劇之王》（外語）鞏固了我們在喜劇類型中的強勢地位。根據Enlightent數據顯示，該劇連續十週霸占收視榜，表現大幅領先同類型其他節目。

It also achieved the second-highest peak popularity ever recorded for iQIYI-exclusive variety shows. What's more impressive is that the show has not only propelled some stand-up comedians to widespread fame, but also played a key role in boosting the industry and capturing the attention of audiences.

它也創下了愛奇藝獨播綜藝有史以來第二高的人氣高峰。更令人印象深刻的是，該劇不僅讓一些單口相聲演員廣為人知，而且在提振行業、吸引觀眾關注方面發揮了關鍵作用。

For movies, we have maintained our leading position in viewership for eleven consecutive quarters according to Enlightent data. The performance was underscored by the theatrical releases like Successor (spoken in foreign language) and No More Bets (spoken in foreign language), which ranked first and second, respectively, on our popularity index rankings.

電影方面，根據Enlightent數據，我們已連續十一個季度維持收視率領先地位。 《繼承者》（外語版）和《不再賭注》（外語版）等院線電影的表現更加突出，它們在我們的受歡迎程度指數排名中分別排名第一和第二。

For animations, our production capabilities for Chinese animations continued to improve as evidenced by an increasing share of revenue generated from our original titles. Along with the ongoing release of the highly popular How Dare You (spoken in foreign language), we also launched The Legend of Sky Lord (spoken in foreign language) and A Moment But Forever (spoken in foreign language), receiving positive feedback.

動畫方面，我們的中國動畫製作能力持續提升，原創作品收入佔比不斷提升。繼《你好敢》（外語版）持續推出的同時，我們也推出了《天王傳奇》（外語版）和《一瞬間》（外語版），收到了正面的回饋。

Leveraging the exceptional quality of our premium content, we have earned broad recognition from reputable Chinese industry awards. At the 34th Flying Apsaras Awards (spoken in foreign language), we topped the list among online video platforms with eleven honors, and we also secured seven honors at the 32nd China TV Golden Eagle Awards (spoken in foreign language).

憑藉優質內容的卓越品質，我們贏得了中國知名行業獎項的廣泛認可。在第34屆飛天獎（外語）上，我們以11項榮譽位居網路影音平台榜首，在第32屆中國電視金鷹獎（外語）上，我們也獲得了7項榮譽。

Turning to our content pipeline, we remain committed to providing our users with top-notch long-form videos. This was highlighted during the iQIYI iJOY conference, our flagship marketing event, where we disclosed an exciting lineup of over 300 titles that are set to premiere in the years 2024 and 2025.

談到我們的內容管道，我們仍然致力於為用戶提供一流的長影片。這一點在我們的旗艦行銷活動愛奇藝 iJOY 大會上得到了強調，會上我們披露了 300 多部精彩作品的陣容，這些作品將於 2024 年和 2025 年首映。

For costume dramas, Fangs of Fortune (spoken in foreign language) was released and will be followed by the much anticipated female-oriented dramas Love Song in Winter (spoken in foreign language) and Moon Embracer (spoken in foreign language).

古裝劇方面，《福牙》（外語）已上映，接下來備受期待的女性題材劇《冬日情歌》（外語）、《擁抱月》（外語）也即將上線。

In reality and suspense genres, audiences can look forward to We Are Criminal Police (spoken in foreign language), Under the Skin Season 2 (spoken in foreign language), The Fearless Season 2 (spoken in foreign language), and Let Wind Go By (spoken in foreign language).

現實、懸疑類型，觀眾可期待《我們是刑警》（外語）、《皮囊之下》第二季（外語）、《霍元甲》第二季（外語）、《隨風而去》 （用外語說）。

Beyond dramas, our movie offerings include the already-released hits Upstream (spoken in foreign language), Go for Broke (spoken in foreign language), and Tiger Wolf Rabbit (spoken in foreign language), with upcoming titles such as The Volunteers: The Battle of Life and Death (spoken in foreign language). Additionally, new online films and iQIYI original films are on the horizon.

除電視劇外，我們的電影作品還包括已上映的熱門影片《逆流而上》（外語）、《破釜沉舟》（外語）和《虎狼兔》（外語），以及即將上映的電影《義勇軍：生死之戰（外語）。此外，新的網路電影和愛奇藝原創電影也即將推出。

In terms of variety shows, we are introducing fresh IPs like My Zone (spoken in foreign language) and The Blooming Journey (spoken in foreign language). For animations, the Q4 pipeline features major titles like the exclusive Dragon Ball DAIMA (spoken in foreign language) and our original martial arts IP Wind Driver in Tang Dynasty (spoken in foreign language).

綜藝方面，我們推出了《我的地帶》（外語）、《花開的旅程》（外語）等新鮮IP。動畫方面，第四季的主要作品包括獨家《七龍珠大馬》（外語）和我們的原創武俠IP《唐朝風車》（外語）。

Move on to membership services. Membership revenues in the third quarter was RMB4.4 billion, down year-over-year. There are three areas that influenced the membership revenue performance. First, as I previously mentioned, although we launched good quality titles in the quarter, there's room for improvement in the supply of premium female-oriented and ancient costume dramas, which are especially appealing to members driven by hit titles.

繼續進行會員服務。第三季會員收入為人民幣44億元，較去年同期下降。影響會員收入表現的三個領域。首先，正如我之前提到的，雖然我們在本季度推出了優質的作品，但優質女性向和古裝劇的供應還有改進的空間，這些作品對熱門作品驅動的會員尤其有吸引力。

Second, amid the current macro headwinds, users drawn to hit titles have grown more cautious in spending, and a broader selection of entertainment options is also seeking to capture their budget and attention. Lastly, the high base effect from last year continued to play a part in our current figures.

其次，在當前的宏觀逆風中，被熱門遊戲吸引的用戶在消費方面變得更加謹慎，更廣泛的娛樂選擇也在尋求吸引他們的預算和注意力。最後，去年的高基數效應繼續在我們目前的數據中發揮作用。

Our innovative value-added services continued to gain traction among users. Notably, we launched Express Package for 13 dramas in the quarter, leading to more than 40% sequential growth in cash purchase, reaching a historical high. Additionally, we further enhanced member benefits to encourage upgrades to higher-tier plans and boost member engagement. This included more than 20 offline events such as fan meetings, early screening events and family fun days.

我們的創新加值服務持續受到用戶的青睞。值得注意的是，本季我們推出了13部劇的快遞套餐，現金購買量較上季成長超過40%，創歷史新高。此外，我們進一步增強了會員福利，鼓勵升級到更高級別的計劃並提高會員參與度。其中包括粉絲見面會、早晨活動、家庭歡樂日等20餘場線下活動。

As always, our primary goal for membership services is to maximize revenue performance. To fulfill this goal and to proactively adapt to the current consumer sentiments, we are making modifications to our membership offering.

一如既往，我們會員服務的首要目標是最大化收入績效。為了實現這一目標並主動適應當前的消費者情緒，我們正在修改我們的會員服務。

Key initiatives include, first, we are combating unauthorized membership account password sharing to enhance account security. Meanwhile, on November 12, we introduced the Family Account option as a better solution for account sharing.

主要措施包括：第一，打擊未經授權的會員帳號密碼分享行為，增強帳號安全。同時，我們於 11 月 12 日推出了家庭帳戶選項，作為帳戶共享的更好解決方案。

Through this program, monthly auto-renewing Golden VIP members have the option to add a separate family account for just RMB8 per month. Each account, both the primary and the family add-on, will maintain separate user profiles and ensure an uninterrupted and personalized viewing experience.

透過該計劃，每月自動續費的黃金VIP會員可以選擇每月只需花費8元人民幣即可添加一個單獨的家庭帳戶。每個帳戶（無論是主帳戶還是家庭附加帳戶）都將維護單獨的使用者個人資料，並確保不間斷的個人化觀看體驗。

Secondly, the ad-supported basic membership plan, which was previously exclusive to iQIYI Lite, has now been expanded to major iQIYI products. The initial performance is in-line with our expectations. Last but not least, content serves as one of the key drivers of our membership business. Integrating mini and short dramas with our top-quality long-form video titles introduces a unique mix that caters to diverse viewer preferences.

其次，由廣告支援的基本會員計畫以前是愛奇藝精簡版獨有的，現在已經擴展到愛奇藝主要產品。初步表現符合我們的預期。最後但並非最不重要的一點是，內容是我們會員業務的關鍵驅動力之一。將迷你劇和短劇與我們的高品質長影片標題相結合，形成了一種獨特的組合，可以滿足不同觀眾的喜好。

Moving on to the advertising business. Advertising revenue during the third quarter was RMB1.3 billion, down year-over-year. Performance ads remained the highlight during the quarter, gained steady growth annually, driven by the solid performance in e-commerce, internet, and mini dramas sectors. The growth was also fueled by our advancements in AI applications, with CPM for AI-powered ads improving by over 20% compared to traditional ads.

轉向廣告業務。第三季廣告收入為人民幣13億元，較去年同期下降。效果廣告仍是本季的亮點，在電商、網路、微劇等領域的強勁表現推動下，效果廣告逐年穩定成長。我們在人工智慧應用方面的進步也推動了這一成長，與傳統廣告相比，人工智慧廣告的每千次曝光費用提高了 20% 以上。

For brand ads, revenue declined annually due to weak advertiser sentiment amid the macro headwinds. Especially, we proactively reduced investment in variety shows in response to the macro headwind to avoid financial setbacks, which led to a major decrease in brand ad revenue.

對於品牌廣告來說，由於宏觀不利因素下廣告主情緒疲軟，收入逐年下降。特別是，我們為因應宏觀逆風而主動減少綜藝節目投資，以避免財務受挫，導致品牌廣告收入大幅下降。

Nevertheless, content-related ads remained popular among brand advertisers. Titles such as The King of Stand-up Comedy, The Moon is Shining and Strange Tales of Tang Dynasty Season 2 attracted the largest share of ad budgets on our platform. Going forward, we will focus on expanding our advertiser base, especially among local brands, and capturing a greater share of budgets from top-tier clients.

儘管如此，與內容相關的廣告仍然受到品牌廣告商的歡迎。 《單口喜劇之王》、《明月當空》和《唐詩異傳第二季》等作品吸引了我們平台上最大的廣告預算份額。展望未來，我們將專注於擴大廣告客戶群，尤其是本土品牌，並從頂級客戶那裡獲得更大的預算份額。

Moving on to technology & products. We are making solid progress in driving technology innovations to improve user experience and operational efficiency. For example, we made upgrades to our products across all devices, which included enhanced interactive bullet chat capabilities, improved audio quality, better video sharing and download options, and refined recommendation features.

轉向技術和產品。我們在推動技術創新以改善用戶體驗和營運效率方面取得紮實進展。例如，我們對所有設備上的產品進行了升級，包括增強的互動彈幕功能、改進的音訊品質、更好的視訊共享和下載選項以及完善的推薦功能。

We have also made further progress in advancing the industrialization of the entertainment business, as our virtual production technology has now reached the mass production stage. iQIYI is one of the first streaming platforms in China with the ability to handle the entire virtual production process for dramas, including production, cost evaluation, technical design, and supervision. This capability allows us to manage multiple projects simultaneously.

我們在推動娛樂產業化方面也取得了進一步進展，虛擬製作技術已達到量產階段。愛奇藝是國內最早具備電視劇虛擬製作全流程能力的串流平台之一，包括製作、成本評估、技術設計和監製。這種能力使我們能夠同時管理多個專案。

In addition, the drama Shadow Love (spoken in foreign language) is the first in China to apply the latest version of Unreal Engine into virtual production. We have also upgraded the iQIYI Virtual Production Studio, with technical indicators meeting the highest standards both in China and internationally. This tech upgrade is expected to effectively enhance our mass production capabilities moving forward.

此外，電視劇《影戀》（外語）是國內首部將最新版虛幻引擎應用於虛擬製作的電視劇。我們也升級了愛奇藝虛擬製作工作室，技術指標達到國內和國際最高標準。此次技術升級預計將有效提升我們未來的量產能力。

Our recent advancements showcase the broad utilization of AI to improve business efficiency. AI plays a central role in advancing our operations, especially in content translation and dubbing for our overseas business.

我們最近的進展展示了人工智慧在提高業務效率方面的廣泛利用。人工智慧在推進我們的營運方面發揮著核心作用，特別是在我們海外業務的內容翻譯和配音方面。

Our AI-driven approach has enabled efficient and highly accurate multilingual translation and multi-tone dubbing services, dramatically reducing the time it takes to release Chinese content overseas and cutting down on translation costs. Moreover, we have developed an AI system capable of rapidly generating plot tags for our content library.

我們的人工智慧驅動方法實現了高效、高精度的多語言翻譯和多音配音服務，大大縮短了中文內容海外發布的時間並降低了翻譯成本。此外，我們還開發了一個人工智慧系統，能夠為我們的內容庫快速產生情節標籤。

This innovative tool has shortened what used to be a months-long manual task into a matter of days. In fact, we have produced plot tags for over 12,000 movies, achieving an impressive accuracy rate of over 92%. The casting process has seen similar improvements with AI swiftly analyzing and matching actors to the right roles, which largely speeds up producers' decision-making workflows.

這種創新工具將過去長達數月的手動任務縮短為數天。事實上，我們已經為超過 12,000 部電影製作了劇情標籤，準確率高達 92% 以上，令人印象深刻。選角過程也有了類似的改進，人工智慧可以快速分析演員並將其匹配到正確的角色，這在很大程度上加快了製片人的決策工作流程。

Finally, for our business performance in regions outside of Mainland China. We recorded solid performances in our overseas business in the third quarter, with both total revenue and membership services revenue gained annual and sequential growth. Notably, membership revenue from Hong Kong, UK, Brazil, and Australia grew over 40% annually. The average daily number of subscribing members overseas also increased annually and sequentially, with Brazil, Mexico, Hong Kong, and Thailand seeing annual growth exceeding 45%.

最後，我們在中國大陸以外地區的業務表現。第三季海外業務表現穩健，總營收和會員服務收入均達到年比和季增。值得注意的是，來自香港、英國、巴西和澳洲的會員收入每年增長超過 40%。海外日均訂閱會員數也逐年較上季成長，其中巴西、墨西哥、香港、泰國年增率超過45%。

The influence of C-dramas continues to strengthen overseas. In the third quarter, total views of Love’s Rebellion topped the viewership rankings across multiple markets, including the US, Australia, Japan, and South Korea. Additionally, we successfully expanded the influence of our original production Strange Tales of Tang Dynasty Season 2 beyond Mainland China. The series made international debut with a premiere in Singapore at the end of July, marked the first ever overseas premier screening for our premium C-dramas.

國劇海外影響力不斷增強。第三季度，《愛情的叛逆》的總觀看次數在美國、澳洲、日本和韓國等多個市場的收視率排行榜上名列前茅。此外，我們也成功將原創作品《唐志怪談第二季》的影響力擴大到了中國大陸以外的地區。該劇於七月底在新加坡首映，在國際上首次亮相，這也是我們的優質韓劇首次在海外首映。

For local content, we launched a number of dramas that received positive feedback. Among these, The Lady and Her Lovers recorded the highest daily revenue among all Thai dramas released on our platform in 2024. The show also ranked first on Google in Thailand, greatly outperformed other shows in the same time slot.

在本土內容方面，我們推出了多部劇集，並獲得了正面的回饋。其中，《貴婦與她的戀人》創下了2024年平台上所有泰劇日收入最高的成績，該劇還在泰國Google上排名第一，大大優於同時段的其他劇。

As we head into the fourth quarter, we will continue to expand our local partnerships and explore additional monetization opportunities. This includes deepening the bundled package cooperation with telecoms providers in Thailand, Malaysia, Singapore, and Hong Kong.

進入第四季度，我們將繼續擴大我們的本地合作夥伴關係並探索更多的貨幣化機會。其中包括深化與泰國、馬來西亞、新加坡和香港電信業者的捆綁套餐合作。

In addition, we aim to amplify the influence of our content and enrich membership benefits through diversified offline events. On November 1, we hosted our first iJOY Conference outside of Mainland China. As we proceed through the remaining months of Q4, we are set to launch a series of appreciation events and promotions for our members.

此外，我們也希望透過多元化的線下活動，擴大內容的影響力，豐富會員權益。 11 月 1 日，我們在中國大陸以外舉辦了第一屆 iJOY 大會。在第四季剩下的幾個月中，我們將為會員推出一系列答謝活動和促銷活動。

Additionally, we're excited about the forthcoming international rollout of more high-quality content. Notably, our talent show Starlight Boys was introduced on October 26 and has already received a positive reception from our audience.

此外，我們對即將在國際上推出更多高品質內容感到興奮。值得一提的是，我們的選秀節目《星光少年》於10月26日開播，已經受到了觀眾的好評。

In Summary, looking ahead, we remain committed to driving innovation and advancements across our business catering to the dynamic entertainment needs. Our targeted initiatives, such as launching mini and short dramas will bring enriched entertainment experiences and further strengthen our commercial capabilities. These efforts are supported by our deep knowledge of both content and users, coupled with our vast industry resources.

總之，展望未來，我們仍然致力於推動整個業務的創新和進步，以滿足動態的娛樂需求。我們有針對性地推出迷你劇、短劇等舉措，將帶來豐富的娛樂體驗，並進一步增強我們的商業能力。這些努力得到了我們對內容和用戶的深入了解以及我們龐大的行業資源的支持。

In parallel, we will deepen our adoption of AI technology, advance our overseas expansion, and fully leverage the potential of our IPs. These strategic efforts are aimed at driving our company towards greater sustainability and success.

同時，我們將深化人工智慧技術應用，推動海外擴張，充分發揮智慧財產權潛力。這些策略努力旨在推動我們公司實現更大的永續性和成功。

Now, let me pass it on to Jun to go through our financial performance.

現在，讓我向Jun 介紹一下我們的財務表現。

Thank you, Mr. Gong, and hello everyone. Let me walk you through the key numbers.

謝謝宮總，大家好。讓我帶您了解關鍵數字。

In third quarter, the total revenues were RMB7.2 billion, down 10% annually. The membership services revenue reached RMB4.4 billion, down 13% annually for three reasons as previously discussed by Mr. Gong.

第三季總收入為人民幣72億元，較去年同期下降10%。會員服務收入達到人民幣44億元，年減13%，原因有如龔先生之前討論的三個原因。

For online advertising, revenue decreased by 20% year over year to RMB1.3 billion. This was primarily due to the decrease in brand ad business, partially offset by the growth in performance ad business. Content distribution revenue reached RMB814 million and grew 52% annually, and other revenues decreased by 8% annually to RMB729 million.

網路廣告收入較去年同期下降20%至人民幣13億元。這主要是由於品牌廣告業務的減少，但被效果廣告業務的成長部分抵消。內容發行收入達人民幣8.14億元，較去年成長52%，其他收入較去年同期下降8%至人民幣7.29億元。

Moving on to costs and expenses. The content cost was RMB4.0 billion, down 5% annually, primarily due to lighter movie offering in the quarter. The total operating expenses were RMB1.4 billion, down 5% annually, primarily driven by the more disciplined management of the marketing spending.

繼續討論成本和費用。內容成本為人民幣 40 億元，年減 5%，主要是因為本季電影供應量減少。總營運費用為人民幣14億元，年減5%，主要是因為行銷費用管理更加嚴格。

Turning to profits and cash flows. The non-GAAP operating income was RMB369 million and its corresponding margin was 5%. The operating cash flow totaled RMB243 million, positive for ten consecutive quarters. At the end of Q3, we had cash, cash equivalents, short-term investments and long-term restricted cash included in the prepayments and other assets of total RMB4.7 billion.

轉向利潤和現金流。非美國通用會計準則營業收入為人民幣3.69億元，相應利潤率為5%。經營現金流達人民幣2.43億元，連續十季為正。截至三季末，預付款項及其他資產所包含的現金、現金等價物、短期投資及長期限制性現金共計人民幣47億元。

For the detailed financial data, please refer to our press release on our IR website. Now, I will now open the floor for Q&A

詳細財務資料請參閱我們IR網站上的新聞稿。現在，我現在開始問答環節

(Operator Instructions) Xueqing Zhang, CICC.

（操作員指示）張學清，CICC。

(interpreted) Thanks management for taking my question. My question is about mini and short dramas. As Gong mentioned in the prepared remarks, the company has enhanced the integration of mini and short dramas. Can management elaborate a little more on it and what's our strategy for mini and short dramas? Thank you.

（解釋）感謝管理層提出我的問題。我的問題是關於迷你劇和短劇的。正如龔在準備好的發言中提到的，公司加強了迷你劇和短劇的融合。管理階層能否詳細說明一下，我們對於迷你影集和短片的策略是什麼？謝謝。

(interpreted) The CEO, Mr. Gong, is answering this question. Starting from the end of September this year, we added mini dramas and short dramas into our content ecosystem. And these two type of content are very much differentiated from a traditional long form video content. So they are very good complement to our content offerings. Especially for this year, the three mini dramas model have been rising significantly and then the user scale is at a pretty sizeable scale and it has been growing. So now is a good time to enter.

（譯）CEO龔先生正在回答這個問題。從今年9月底開始，我們在內容生態中加入了迷你劇和短劇。這兩類內容與傳統的長影片內容有很大不同。因此，它們是對我們的內容產品的很好補充。尤其是今年，三部微劇的模式明顯上升，用戶規模也相當大，而且還在持續成長中。所以現在是進入的好時機。

So for mini dramas, we classify them as they are 1 to 5 minutes long in vertical format and then for short dramas, there are 5 to 20 minutes long in horizontal format. And for now, we're focusing on the mini drama segment.

因此，對於迷你劇，我們將其分類為縱向長度為 1 至 5 分鐘，而短劇則為橫向長度為 5 至 20 分鐘。目前，我們的重點是迷你劇部分。

In the past two years, we participated in a mini drama -- participating in multiple ad model. And we have been actually innovative in this mini drama sector by innovating different models and formats. For users, it used to be participating or watching the contest by free or pay per view. And we now introduced the subscription model to this business model. And for our current subscribers, they can watch vast majority of the mini dramas for free and then pretty soon in the future, they will watch everything for -- mini dramas for free.

這兩年，我們參演了一部迷你劇——參演多個廣告模特兒。我們在微劇這個領域其實也一直在創新，創新了不同的模式和形式。對用戶來說，過去是透過免費或按次付費的方式參與或觀看比賽。我們現在將訂閱模式引入這種商業模式。對於我們目前的訂閱者來說，他們可以免費觀看絕大多數迷你劇，並且在不久的將來，他們將免費觀看所有迷你劇。

For the [free] business model, there are three advertising model and then -- or they can do pay per view. And we actually introduced a subscription model to the business model, and we believe this will be positive and constructive for the membership retention and also to get new users.

對於[免費]商業模式，有三種廣告模式，然後——或者他們可以按次付費。我們實際上在商業模式中引入了訂閱模式，我們相信這對會員保留和吸引新用戶來說將是積極且建設性的。

In terms of content strategy, we will evolve with mini dramas through various methods, including the licensed copyright of films right and buyout and profit sharing. Going forward, we'll focus on the premium high content of the mini dramas and then eventually we will develop a unique style that's generated by -- belongs to iQIYI. And we hope in the future that for iQIYI mini dramas in terms of the content production quality and also the value provided to users, it will be a further improvement on [current goal]. Thank you.

在內容策略上，我們會透過片權授權、買斷分紅等多種方式向微劇演進。展望未來，我們將專注於微劇的優質高內容，最終我們將形成屬於愛奇藝的獨特風格。我們希望未來愛奇藝小劇無論是在內容製作品質上，或是為使用者提供的價值上，都會比【目前的目標】有進一步的提升。謝謝。

Lei Zhang, Bank of America.

張磊，美國銀行。

(interpreted) Thanks management for taking my question. I want to follow up on the short drama side. Can you share with us the capacity edge in investing short drama and any impact to our content cost in the future? Thank you.

（解釋）感謝管理層提出我的問題。我想跟進短劇方面。能否跟我們分享一下短劇投資的產能優勢以及對我們未來內容成本的影響？謝謝。

(interpreted) The CEO, Mr. Gong, is answering this question. So in terms of our adventures in mini dramas, first of all, we have advantage in products and technology. For mini dramas, currently -- materially -- a material amount of the traffic is happening on the mobile side. So on the mobile side, we have two major applications, the iQIYI App and also iQIYI Lite.

（譯）CEO龔先生正在回答這個問題。所以我們在微劇方面的冒險，首先我們有產品和技術的優勢。對於迷你劇來說，目前大量的流量發生在行動端。所以在行動端，我們有兩個主要的應用程序，愛奇藝App和愛奇藝精簡版。

So for these two apps, we have very mature technology and infrastructure and also a good user base. And actually, a good site and actually a good portion of the users are subscribers. So basically, based on that, when we add a new content genres to this and then combine it with a good upgrade to the application, it will be a good adaption to the current strategy.

所以對於這兩個應用程序，我們有非常成熟的技術和基礎設施，也有很好的用戶基礎。事實上，一個好的網站其實很大一部分使用者都是訂閱者。所以基本上，基於此，當我們添加新的內容類型，然後將其與應用程式的良好升級結合時，它將很好地適應當前的策略。

For the first upgraded version of the app, iQIYI app actually have been released already, we're doing the A/B test right now. So most of the users when you download the or upgraded the application, you will see the changes.

對於該應用程式的第一個升級版本，愛奇藝應用程式實際上已經發布了，我們現在正在進行A/B測試。所以大多數用戶在下載或升級應用程式時，都會看到變化。

For iQIYI app, it will continue to focus on the long-form video content. From the business model perspective, it will be majority focused on the subscription model. And for iQIYI Lite application, it will focus on mini dramas and for dramas mainly driven by the advertising model.

對於愛奇藝來說，它將繼續專注於長影片內容。從商業模式來看，將以訂閱模式為主。而愛奇藝精簡版應用則以迷你影集為主，以廣告模式為主的劇集為主。

The vast majority of the content providers for mini dramas are iQIYI's existing partners. So cooperation in these new categories are further expanded and our deepened -- our partnership scope allowing us to rapidly scale up in these areas and then at a little -- relatively little cost.

絕大多數微劇的內容提供者都是愛奇藝現有的合作夥伴。因此，這些新類別的合作進一步擴大，我們的合作夥伴範圍使我們能夠在這些領域迅速擴大規模，然後以相對較低的成本。

So basically, the operational rules or the principles in terms of managing these two type of content, the long form video content versus mini dramas are relatively similar or don't have a major changes. So it will be pretty fast for our teams to pick up and then master in this.

所以基本上，長影片內容和微劇這兩類內容的操作規則或管理原則是比較相似的或沒有太大的變化。因此，我們的團隊很快就能掌握並掌握這一點。

In terms of the funding for the content for mini dramas, there are only two aspects. First of all, we'll lower the investment in terms of the low ROI in long-form video content. And then secondly, then we will scientifically and also rationally, bring in the budget for a mini series. Thank you.

就微劇內容的經費而言，無外乎兩面。首先，我們會降低投資，因為長影片內容的投資報酬率較低。然後第二，那我們就會科學合理的把迷你劇的預算納入。謝謝。

Maggie Ye, CLSA.

葉瑪姬，里昂證券。

(interpreted) Thank you for this opportunity to ask questions. My question (technical difficulty) membership. In October, we announced the launch of family account option, wondering if management can share more insights into the strategic consideration around this initiative, especially given the current micro environment and consumer trend? What's our expectation on this strategy over near term and longer term? How is the initial feedback we received from consumers and users so far since the introduction? Thank you.

（解釋）感謝您給我這個提問的機會。我的問題（技術難度）會員資格。十月份，我們宣布推出家庭帳戶選項，想知道管理層是否可以分享更多關於圍繞這一舉措的戰略考慮的見解，特別是考慮到當前的微觀環境和消費趨勢？我們對這項戰略的近期和長期預期是什麼？自推出以來，我們從消費者和用戶收到的初步回饋如何？謝謝。

Thank you, Maggie. And we will invite Mr. Duan, who's in charge of this business segment to answer this question.

謝謝你，瑪吉。我們就請到該業務板塊的負責人段先生來回答這個問題。

(interpreted) iQIYI's family account is a high-cost effective shared membership service plan we introduced to enhance the user experience for family members. It better serve users' independent and diverse viewing needs and user scenario.

【解讀】愛奇藝家庭號是我們為提升家庭成員的使用者體驗而推出的一項高性價比的共享會員服務計畫。更能服務使用者獨立、多樣化的觀看需求和使用者場景。

So the family account and the primary account are actually standalone membership accounts with individual passwords and also playback history. So this not only effectively improves the user experience but also protects the account security.

因此，家庭帳戶和主帳戶實際上是獨立的會員帳戶，具有單獨的密碼和播放歷史記錄。這樣不僅有效提升了使用者體驗，也保護了帳戶安全。

And as you know that the video consumption needs of the elderly and the young demographics are steadily increasing, and the family account is actually designed to effectively address their challenges in account management and accessing the content.

如您所知，老年人和年輕人的視訊消費需求正在穩步增長，而家庭帳戶實際上旨在有效解決他們在帳戶管理和內容存取方面的挑戰。

The membership account is an innovative attempt in the membership product model which has positive impact on improving membership conversion and revenue. So going forward in the future, we'll continue to combat password sharing and offer users more cost effective choices and aim for the long term healthy development of the membership business.

會員帳戶是會員產品模式的創新嘗試，對於提高會員轉換和收入有正面影響。因此，未來我們將繼續打擊密碼共享，為用戶提供更具成本效益的選擇，以實現會員業務的長期健康發展。

The family account was actually officially launched on November 12, and we will observe the performance for some time before sharing the user feedback and data outcomes with everyone.

家庭號其實在11月12日就正式上線了，我們會觀察一段時間的表現，然後再把用戶回饋和數據結果分享給大家。

Thank you.

謝謝。

[Li Zhao, Guangfa].

[李鑷廣發].

(interpreted) I will translate myself. Dr. Gong has mentioned, the long-form video are fundamentals to iQIYI's content ecosystem. My question is about your strategy for production of dramas. Could you share with us the [project length], seeing an innovative direction of your future drama series? Thank you.

（翻譯）我自己翻譯。龔博士提到，長影片是愛奇藝內容生態的基礎。我的問題是關於你們的電視劇製作策略。能跟我們分享一下【專案時長】，您未來劇集的創新方向嗎？謝謝。

Thank you. And we'll invite Mr. Xiaohui, our Chief Content Officer, to take this question.

謝謝。我們將邀請我們的首席內容官曉輝先生來回答這個問題。

(interpreted) We believe although there have been some cyclical fluctuations in the industry, we believe that the recovery of the market confidence and user demand, long form videos, will still be one of the strongest demand among users in the mid to long term. We believe it will remain at the core of iQIYI's content ecosystem as well.

（解讀）我們認為，雖然產業出現了一些週期性波動，但我們認為市場信心和用戶需求的恢復，長影片仍將是中長期用戶最強勁的需求之一。我們相信它也將繼續成為愛奇藝內容生態系統的核心。

So going forward, we will enhance the sustainability of a diverse high quality content supply through powerful reform measures. Continue to achieve a win-win situation for both content quality and commercial revenue.

下一步，我們將透過強而有力的改革舉措，增強多元化優質內容供給的可持續性。持續實現內容品質與商業收入雙贏。

Based on the insights into societal sentiment and also the changes in user using practices, we believe we will comprehensively upgrade the production and operational mechanisms for dramas, films, animation and variety shows. We will improve the production and content launch efficiency, focus resources on creating high quality works and strengthen the commercial aspect of the content.

基於對社會情緒的洞察以及用戶使用習慣的變化，我們相信我們將全面升級電視劇、電影、動漫和綜藝節目的製作和營運機制。提升製作與內容投放效率，集中資源打造精品，強化內容商業化。

So for content planning, we will structurally optimize the process by improving the coordination of the number of new dramas, episodes and genres and will reasonably reduce the number of key new drama releases each year.

所以在內容規劃上，我們會從結構上優化流程，提高新劇數量、劇集數量、類型的協調性，合理地減少每年重點新劇的上映數量。

We will strictly curate project selection to prioritize excellence and concentrate resource allocations on premium content with high commercial value. So from inception, all projects will embody commercial appeal, mass market business and contemporary relevance.

我們將嚴格選題，精益求精，集中資源配置優質、高商業價值的內容。因此，從一開始，所有項目都將體現商業吸引力、大眾市場業務和當代相關性。

For content evaluation, we will establish stricter assessment standards that focus more on revenue capability and innovation ability within the framework of the content related cost ratio. For content creation, we will optimize scripts and filming techniques to align with users' evolving viewing preferences and simultaneously, we will aim to deepen our understanding of social trends and create works that resonate more profoundly with contemporary societal emotions and [take].

在內容評估方面，我們將制定更嚴格的評估標準，在內容成本比的框架中更重視營收能力和創新能力。在內容創作方面，我們將優化劇本和拍攝技巧，以適應用戶不斷變化的觀看偏好，同時，我們將致力於加深對社會趨勢的理解，創造出更深刻地與當代社會情感產生共鳴的作品。

For content production, we'll strengthen project management and project content, hopefully monitor project progress and work with partners to reduce cost and improve production efficiency.

在內容製作方面，我們會加強專案管理和專案內容，希望能夠監控專案進度，並與合作夥伴一起降低成本，提高製作效率。

And from a team building perspective, we are committed to the continuous improvement in our in-house studio mechanism. Our studios which are structured around the producers focus on consistently attracting high quality talent from the market. We aim to cultivate healthy internal competition by establishing mechanisms that reward innovation and promote distinct content styles. This strategy ensures ongoing evolution through a process of natural selection where only the excellence drives.

而從團隊建立的角度來看，我們致力於不斷完善我們內部的工作室機制。我們的工作室以製片人為中心，致力於不斷吸引市場上的高素質人才。我們的目標是透過建立獎勵創新和推廣獨特內容風格的機制來培養良性的內部競爭。這項策略確保了透過自然選擇過程不斷進化，只有卓越才能驅動。

And that concludes the answer to this.

這就是這個問題的答案。

There are no further questions at this time. I'll now hand back to management for closing remarks.

目前沒有其他問題。我現在將請管理階層作總結發言。

Thank you, everyone, for participating in the call today. If you have further questions, do not hesitate to contact us. Thank you again.

謝謝大家參加今天的電話會議。如果您還有其他疑問，請隨時與我們聯繫。再次感謝您。

Thank you.

謝謝。

That does conclude our conference for today. Thank you for participating. You may now disconnect.

我們今天的會議到此結束。感謝您的參與。您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

此文字記錄中標記（翻譯）的部分是由現場通話中的口譯員說出的。口譯員由贊助本次活動的公司提供。