(Yicai Global) Aug. 20 -- Climbing content costs and shrinking ad revenue have increased the second fiscal quarter net losses of Chinese video entertainment service provider Iqiyi to CNY2.3 billion (USD326 million) in a significant jump from last year's CNY2.1 billion, the unaudited financial report the company released yesterday shows.
iQiyi's second-quarter business income was CNY7.1 billion in a one-sixth rise on the year before. Income from member services was 3.4 billion and online advertising income was CNY2.2 billion in the fourth straight quarter in which member service revenue has outpaced that of advertising.
Content distribution gained CNY51.79 million (USD75.4 million) and other sources of revenue took in CNY979.2 million.
iQiyi's shares [NASDAQ:IQ] closed at USD18.08 yesterday, up USD1.00 or 5.85 percent, but fell at one point over 9 percent in ensuing after-hours trading.
The company's operating costs were CNY7 billion, up 14 percent yearly, mainly driven by an increase in content costs. These were CNY5 billion in a 7 percent rise over the same time last year.
iQiyi had 100 million registered users as of June 30, up by one-half from the 67.10 million enrolled as of June 30, last year. Its paid membership as of June 30 made up almost 99 percent of the total number of its subscribers.
iQiyi projects third-quarter revenue at between CNY7.2 billion and CNY7.6 billion in an annual 4 percent to 10 percent rise.
Editor: Ben Armour