Core Viewpoint - iQIYI's latest financial report reveals a significant decline in revenue and a return to net losses, highlighting the challenges faced by the long video industry amid competition from short video platforms [1][6][17]. Revenue Performance - In Q2 2025, iQIYI's revenue decreased by 11% year-on-year to 6.63 billion yuan, with a net loss of 133.7 million yuan compared to a net profit of 68.7 million yuan in the same period last year [1]. - Membership services, the largest revenue source, generated 4.09 billion yuan, accounting for 61.7% of total revenue, but saw a 9% decline year-on-year [3]. - Advertising revenue fell by 13% to 1.27 billion yuan in the first half of the year, attributed to macroeconomic pressures and competition from short video platforms [8][10]. Market Position and Competition - iQIYI maintains a leading position in the long video sector, with the highest market share in series and movies for several consecutive quarters, but struggles to convert viewership into paid subscriptions [2][4]. - The rise of ByteDance's Hongguo short drama platform, which reached 210 million monthly active users in under three years, poses a significant threat to iQIYI and its competitors [5][16]. Content Strategy and Adaptation - iQIYI is adapting to market changes by launching "micro-theater" and "short theater" initiatives, aiming to produce high-quality short dramas while maintaining its strengths in long-form content [12][14]. - The company has established a "micro-drama creation alliance" with leading production companies, sharing 70% of revenue with content creators to enhance the quality of short dramas [13]. International Expansion - iQIYI's international version has seen record-high daily membership numbers, with revenue growth of approximately 35% in key markets such as Brazil, Mexico, and Indonesia [18]. - The company is also planning to launch original micro-dramas overseas, indicating a strategic focus on international markets [18]. Financial Health - As of June 30, iQIYI held 5.06 billion yuan in cash and cash equivalents, indicating sufficient liquidity to support ongoing operations and new initiatives [19]. - The company's CFO emphasized manageable debt levels, with a near 1:1 ratio of long-term to short-term debt, supporting future business operations and growth [20][21]. Leadership Changes - iQIYI recently appointed a new chairman, He Haijian, who has a background in financial management and may facilitate new financing opportunities for the company [22].