‘The Story of Yanxi Palace’ drives iQiyi revenue as profits remain elusive

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Chinese period drama The Story of Yanxi Palace garnered over 20 billion views between July and September, driving third-quarter user growth and revenue for Baidu-owned video streaming platform iQiyi.

The 70-episode show, which was co-produced by iQiyi and Huanyu Film, follows the quest of a Wei Yingluo who enters the court of the Qianlong Emperor to find the truth behind her sister’s death. At the height of its popularity, its scenes monopolized smartphone screens everywhere from supermarkets to subway cars, with viewers enthralled by tales backstabbing concubines embroiled in games of betrayal, deceit, and finally love. The show featured elements including exquisitely detailed and colorful costumes and racy storylines.

The Story of Yanxi Palace was China’s most watched online drama for 39 consecutive days this summer. Viewers streamed it an average of 300 million times a day, generating more than 700 million daily views at its peak.

Still, China’s leading video platform remains mired in red ink, with losses widening to RMB 3 billion ($430 million) in the three months ending September from RMB 1 billion in the same period last year.

Two episodes were released daily, multiple times a week. Initially, episodes were released from Thursday to Sunday, later from Tuesday to Sunday, and eventually every day as the show culminated.

While non-paying subscribers could watch the show, the benefit of taking a subscription is early access to content—in this case, eight episodes ahead of users accessing for free. It’s unclear whether paying subscribers will continue to use the company’s paid tiered service once they finish watching shows such as these.

iQiyi’s subscribers in the period topped 80 million, up 89% year-on-year. According to the company, 98% of its users hold paid subscriptions.

iQiyi’s increase in subscribers also resulted in a 78% increase in membership services revenue—rising to RMB 2.9 billion, and a 48% increase in revenue for the company compared to the third-quarter of 2017, reaching more than RMB 6.9 billion.

The company’s hit show was distributed across 70 countries worldwide, driving its content distribution revenue to RMB 834.6 million, a 220% increase from the same period in 2017.