iQiyi Wins Compensation From Account Renting Platform
Blade Network Technology was ordered to compensate $iQIYI(IQ.US$ for providing a platform for users to rent iQiyi accounts and charging a handling fee.
Although it is users who rent accounts, the company established the platform to provide account renting service, which is commonly prohibited in the video industry and violates the principle of good faith and basic business ethics, the court decided.
Membership business is the core revenue source of Chinese video platforms.
Take iQiyi for example. According to its second quarter results, Beijing-headquartered iQiyi posted total revenue of CNY6.7 billion (USD935 million) in the quarter, with advertising revenue of CNY1.2 billion, down 35 percent from a year earlier. Membership service revenue reached CNY4.3 billion, up 7 percent, and accounting for 64 percent of total revenue.But iQiyi’s membership revenue growth is mainly based on price markup. By the end of the second quarter, the number of its paying members fell by 900,000 from a year earlier.
$TENCENT(00700.HK$ ’ paying members also fell 2.4 percent from a year earlier or declined 1.6 percent from the first quarter to 122 million in the second quarter, according to the company’s financial results.
As a result, platforms’ control over the membership business has become more stringent.
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