iQiyi's 2025 performance decline stems primarily from continued weakness in its two core business segments: membership and advertising services.

On February 26, 2026, iQiyi released its fourth quarter and full-year financial results for 2025, providing capital markets with a clear view of the actual operating conditions within the long-form video industry. While the company maintained its leading position in the drama series segment and reported both quarter-over-quarter and year-over-year revenue growth in Q4, with overseas membership revenue increasing by over 30%, and successfully launched its first offline theme park, the report highlighted significant concerns. Since reaching a revenue peak with the drama "The Knockout" in 2023, iQiyi has experienced two consecutive years of revenue decline. Total revenue for 2025 was 27.29 billion yuan, down 7% year-over-year. Non-GAAP operating profit plummeted by 73% to 640 million yuan, and net income attributable to the company shifted from profit to a loss of -206 million yuan.

The core membership and advertising businesses both declined simultaneously. Membership service revenue fell 5% year-over-year to 16.81 billion yuan, while online advertising revenue decreased 9% to 5.19 billion yuan. The weakness in these two fundamental areas has placed considerable pressure on iQiyi's overall performance.

During the earnings call, CEO Gong Yu outlined three strategic priorities for 2026, aiming to break through the current challenges by focusing on premium content, growth in overseas and experiential businesses, and the development of an AIGC ecosystem. However, capital markets and industry observers identified multiple underlying risks within the report. These include user attrition due to insufficient content supply, growth limitations amid存量 competition within the long-form video industry, profitability challenges for new business initiatives, and concerns regarding strategic continuity following the departure of key executives responsible for cost-cutting and efficiency improvements.

As the first platform in the long-form video industry to achieve profitability, iQiyi's financial difficulties reflect not only its own challenges but also serve as a microcosm of the broader sector, which is grappling with saturated user growth, intense content competition, and a reliance on limited business models. The fluctuations in this financial report reveal not just iQiyi's developmental risks, but also the significant obstacles facing long-form video platforms seeking a breakthrough.

The continuous weakening of iQiyi's core businesses in 2025 is primarily attributed to the dual pressures of reduced content supply and intensifying competition for existing users within the industry. Even while maintaining the leading market share in drama series, the platform has struggled to counter the trends of user churn and advertiser budget contraction. The financial report explicitly stated that the decline in membership revenue was mainly due to a reduction in content supply. The broader industry trend of decreased project approvals and productions has made it difficult for iQiyi to adequately replenish its content library.

In terms of content performance, iQiyi's strength in dramas remains, but its variety show segment has become a drag. This imbalance in content structure has directly impacted user engagement. According to Yunhe Data, iQiyi's total effective play volume for dramas maintained the top market share in 2025, with 8 of the top 20 exclusive series on the leaderboard. Works like "All Things Grow" and "Strange Tales of Tang Dynasty: Chang'an" became key traffic drivers. However, the variety show segment faced challenges with aging franchises. Top IPs such as "Let's Farm Season 3" and "King of Comedy Stand-up Season 2" saw their effective play volumes drop to 410 million and 390 million, declines of 26.8% and 17% respectively compared to previous seasons. New variety shows have yet to effectively fill the gap, and this homogenization of content supply has led to a continued decrease in the platform's appeal to users.

More critically, iQiyi's strategy of "reducing episode counts per series while increasing the number of series" to ensure content supply has not yet yielded positive results. Shorter series lead to shorter user retention cycles, and if the pace of new releases cannot keep up, it directly reduces members' willingness to renew their subscriptions.

The存量 competition within the long-form video industry has further exacerbated pressure on iQiyi's core business. By 2025, the industry had entered a phase of "存量 optimization." While the total user base surpassed 1 billion, the average annual growth rate was only 2%. The top tier, comprising iQiyi and Tencent Video, is engaged in fierce competition. Youku has focused on niche genre theaters, and Mango TV firmly occupies a specific market segment leveraging its strength in variety shows. The overlap in users across platforms continues to increase, leading to rising churn rates. Tencent Video, with its larger content budget, consistently produces hits. Youku has cultivated stable user communities around its mystery and Hong Kong drama theaters. Mango TV maintains high engagement among female users. In contrast, iQiyi, facing a content shortage, struggles both to attract new users and retain existing ones. After reaching a peak in membership scale, a decline became inevitable.

Simultaneously, competition from short-form video platforms continues to divert user attention. Mid-to-short-form content on platforms like Douyin and Kuaishou encroaches on the space for long-form video, diluting the time users spend on long-form platforms and consequently reducing advertisers' willingness to spend.

The decline in advertising business is a result of both industry trends and platform-specific issues. iQiyi's online advertising revenue decreased by 9% year-over-year in 2025, partly due to macroeconomic pressures leading to advertiser budget constraints, and partly due to reduced platform user engagement and activity levels diminishing advertising value. The monetization of advertising in the long-form video industry is inherently constrained by members' "ad-free" privileges. After user growth plateaued, iQiyi failed to effectively increase advertising revenue per user and lacks the core advantage in brand advertising that platforms like Mango TV possess, making the advertising decline inevitable. Third-party industry analysts note that iQiyi's advertising business relies heavily on the traffic boost from top-tier content. The absence of a phenomenonally popular hit in 2025 led to cooler advertiser interest. This "hit-driven advertising" model struggles to provide sustained revenue support in an environment of unstable content supply.

Confronted with a weak core business, iQiyi is pinning its hopes on new ventures like overseas operations and offline theme parks to establish a second growth curve. While overseas membership revenue grew over 30% year-over-year in 2025, accelerating to 40% in the second half, and the first offline park opened in Yangzhou, the financial report conceals underlying issues. Overseas growth may be hitting a ceiling, and the offline park faces questions regarding both user experience and profitability, making it difficult for new businesses to shoulder the burden of performance growth in the short term.

The high growth of the overseas business actually masks growth bottlenecks and cost pressures. iQiyi's overseas strategy centers on exporting mainland Chinese dramas, achieving some success in Southeast Asian markets. However, this "content出海" model faces increasing challenges. An entertainment industry analyst pointed out that overseas operational costs are high, content adaptation requires continuous investment, and the global population ceiling limits the growth potential of the membership and advertising-based business model. Simply expanding into new markets cannot guarantee sustainable growth. In fact, while iQiyi plans to increase local content production and acquisition in markets like Thailand, Malaysia, and Indonesia in 2026, local content production demands significant financial and human resources. The willingness to pay and ARPU in these markets are far lower than in China, creating a challenge for achieving a positive return on investment. Furthermore, overseas markets are competitive, with international giants like Netflix and Disney+. iQiyi holds no clear advantage in brand influence or content library. The high growth comes with the reality of increasing marginal costs.

The offline theme park business, while adopting a capital-light model to avoid heavy asset investment, cannot hide issues related to user experience and an unclear profit model. iQiyi's parks emphasize "IP immersion + strong interaction," utilizing a model where it licenses IP, technology, and operations, while partners handle fixed asset investment. This seemingly reduces iQiyi's risk, but market feedback from the Yangzhou park highlights significant problems. Negative reviews on social media cite small scale, limited attractions, high ticket prices offering poor value, and weak interactivity within IP-themed areas. These issues directly impact repeat visitation and word-of-mouth promotion. The success of Disney and Universal Studios stems from powerful IP libraries and immersive experiences. iQiyi's IPs are primarily based on popular dramas, lacking long-term IP operation and derivative content support. The popularity of IPs like "The Knockout" and "Mysterious Lotus Casebook" is time-sensitive, making it difficult to sustain lasting appeal. More critically, iQiyi's parks currently rely mainly on ticket sales, with revenue from secondary consumption like food and merchandise being extremely low. Yet, secondary spending is a core profit driver for theme parks. This singular profit model makes sustainable profitability challenging.

Additionally, the development of new businesses diverts resources from iQiyi's core operations, creating a vicious cycle where "new businesses struggle to profit, while core business is hampered." To advance its offline parks and overseas ventures, iQiyi must allocate significant R&D, operational, and marketing resources. This diversion exacerbates the existing shortage of content supply for its core business. In 2025, iQiyi's content costs were 15.45 billion yuan, accounting for 56.6% of total revenue, a slight decrease year-over-year. In an industry where overall content costs are rising, compressing these costs directly impacts content quality and quantity, further contributing to user loss in the core business and reinforcing the negative cycle. Capital markets are cautious about this strategy of "spreading efforts thin across multiple fronts." Many analysts note that iQiyi's core issue is stabilizing its fundamental business, not blindly expanding into new areas. New business initiatives should be built upon a stable core; otherwise, they may prove counterproductive.

iQiyi's performance challenges in 2025 result not only from external factors and industry competition but also from internal strategic execution risks. The benefits of cost-cutting and efficiency measures were offset by revenue decline. The departure of key executives raises concerns about strategic continuity. The highly anticipated development of an AIGC ecosystem remains largely conceptual, with tangible results unlikely in the short term. These internal issues cast uncertainty on iQiyi's path forward.

The cost-cutting and efficiency strategy has reached a bottleneck, and the departure of its key architect has heightened market concerns. Since 2022, iQiyi became the first profitable long-form video platform largely through these measures, spearheaded by former CFO Wang Jun. However, his resignation in January 2026 disrupted the company's cost-control rhythm. Although he will serve as an advisor during the transition and an interim CFO was appointed, the market questions the continuity of its financial strategy. While iQiyi achieved a 2% year-over-year reduction in total costs for 2025, the effectiveness of cost control could not offset the 7% revenue decline, leading to a 73% plunge in Non-GAAP operating profit. This indicates the cost-cutting initiative has hit a plateau. The core cost in the long-form video industry is content. Although iQiyi's content cost ratio slightly decreased, further compression amid content scarcity would accelerate user loss. Conversely, increasing content investment would heighten profit pressure, placing iQiyi in a dilemma: "cut costs and lose users, or increase costs and lose profits."

The construction of an AIGC ecosystem is seen as a key future breakthrough for iQiyi, but it remains in the conceptual stage with no visible results yet. CEO Gong Yu stated plans to vigorously build an AIGC ecosystem to shift the media platform from a centralized to a decentralized model. However, based on current industry development and iQiyi's positioning, implementing this strategy faces several hurdles. Firstly, AIGC application in long-form video is currently limited to auxiliary tasks like scriptwriting, editing, and special effects, not core content generation. iQiyi has not disclosed specific AIGC achievements and lacks a clear technological reserve or talent strategy for it. Secondly, the core competitiveness of long-form video platforms lies in creative storytelling, an area where AIGC cannot easily replace human ingenuity. Over-reliance on AIGC might lead to content homogenization. Finally, AIGC R&D and application require substantial financial and technical investment, which iQiyi's current profitability struggles to support. AIGC ecosystem development is a long-term strategy unlikely to materially support performance in the short term.

More critically, iQiyi's strategic focus appears diluted. Multi-pronged initiatives scatter limited resources, hindering the development of a core competitive edge. The three strategic goals for 2026—premium content, growth in overseas/experiential businesses, and AIGC ecosystem—seem comprehensive but lack clear prioritization. Against the backdrop of declining revenue and profits, iQiyi aims to stabilize its domestic core, expand overseas, develop offline parks, and pursue AIGC simultaneously. Finite resources are over-dispersed, preventing any single strategy from receiving adequate support. In contrast, Mango TV competes through differentiation based on its variety show strength, and Youku focuses on niche theaters. Having lost its content supply advantage, iQiyi has yet to forge a new core competency. The ambiguity and dispersion of its strategic layout make it increasingly passive in the competitive landscape.

In summary, iQiyi's 2025 financial report acts as a mirror reflecting the collective challenges of the long-form video industry:存量 competition post user growth peak, supply difficulties amid content saturation, profit pressures from a singular business model, and the numerous challenges of new business expansion. The hidden risks within the report include surface-level issues like content shortage and core business weakness, as well as deeper problems like scattered strategy and execution concerns. Addressing these issues requires not only internal adjustments by iQiyi but also a fundamental rethinking of the industry's development logic.

For iQiyi, the key to breaking through lies first in securing its core business by solving the content supply problem. Instead of further cutting content costs, resources should be concentrated on producing premium content to increase the hit rate, while optimizing the content structure to strengthen the weak variety show segment. A "twin-engine" drive of dramas and variety shows could enhance user stickiness and retention. In membership operations, the focus should shift from pure scale growth to deepening per-user value through tiered membership systems and personalized benefit packages to increase ARPU. Exploring a balance between membership and advertising, improving ad monetization efficiency without compromising the member experience, is also crucial.

Secondly, new business ventures require a return to rationality and a focus on core strengths. Overseas expansion should abandon a "blanket" approach, concentrating instead on key markets like Southeast Asia, deepening local content production, and leveraging the strength of mainland Chinese dramas for differentiated competition to lower operational costs. The offline park business needs experience optimization, enhancing interactivity and immersion in IP scenes, while diversifying revenue streams by boosting secondary consumption. The capital-light model's advantages should be maximized, not through blind expansion, but through refined execution.

Finally, strategic execution demands focus and continuity. The cost-cutting strategy should evolve towards "precision cost-cutting and effective efficiency gains," controlling non-core expenses while increasing investment in core content and technology. AIGC ecosystem development should be gradual, starting with practical applications in content production assistance before exploring core uses, accompanied by strengthened technical reserves and talent acquisition.

iQiyi's financial predicament is not an isolated case but an inevitable phase in the maturation of the long-form video industry. For platforms to truly break through, reliance on traffic红利 and capital burning must end. The focus must return to the essence of content, deeply understanding user needs, and exploring diversified business models. For iQiyi, 2026 will be a pivotal year. Its future trajectory will be determined by its ability to secure its core business, achieve tangible results from new ventures, and maintain strategic execution continuity. For the entire industry, iQiyi's struggles and explorations will provide a critical reference point. The path to a breakthrough for long-form video is long and arduous, but progress comes through persistent action.