Executive Summary
Key takeaways from this analysis of iQiyi’s current challenges:
- iQiyi was recently cited by China’s Ministry of Industry and Information Technology for unreachable customer service, reflecting broader user relationship issues.
- The platform’s multi-tiered membership system and persistent advertising in paid subscriptions are generating significant user complaints.
- Financial performance shows concerning trends with revenue declining across all core business segments throughout 2024.
- Comparison with competitors reveals iQiyi has the most complex and expensive membership structure among major Chinese streaming platforms.
- These developments raise important questions about sustainable growth strategies in China’s competitive streaming market.
Regulatory Spotlight on Service Failures
The recent regulatory action against iQiyi signals growing scrutiny of consumer protection in China’s digital services sector. When the Ministry of Industry and Information Technology conducted its quarterly assessment of internet company service quality, iQiyi stood out for all the wrong reasons. The platform’s customer service channels proved effectively unreachable during testing, prompting official criticism and demands for improvement.
MIIT’s Quality Report Findings
According to the “Notice on Telecommunications Service Quality for the Third Quarter of 2025” released by the Ministry of Industry and Information Technology, iQiyi was among several platforms where artificial customer service could not be reached during testing. The regulatory body has since urged these companies to implement corrective measures and substantially enhance their service capabilities. This public naming represents more than a minor inconvenience—it highlights systemic issues in how iQiyi prioritizes user support amid its broader iQiyi membership over-monetization strategy.
iQiyi’s Silent Response
Following the MIIT announcement, iQiyi maintained official silence on the matter. Journalists attempting to contact customer service representatives encountered only automated responses indicating “currently all agents are busy.” This pattern of non-engagement reinforces perceptions that user concerns rank low among corporate priorities. The absence of prompt acknowledgment or remediation plans suggests that iQiyi’s approach to customer relations may be worsening even as its iQiyi membership over-monetization intensifies.
Membership Model Over-Exploitation
iQiyi’s approach to membership segmentation has evolved into what many users describe as an excessively complex and expensive system. The platform now offers four distinct membership tiers with progressively higher prices and varying benefits. This fragmentation represents a strategic shift toward extracting maximum value from each user segment, but it comes at the cost of user satisfaction and loyalty.
Tiered Pricing Structure Analysis
iQiyi currently structures its memberships across four categories: Basic, Gold, Platinum, and Star Diamond. Annual subscription prices range from 138 yuan for Basic to 398 yuan for Star Diamond when opting for continuous billing. Each tier offers different privileges regarding simultaneous device usage, with Basic and Gold members limited to one device, Platinum supporting two, and Star Diamond accommodating three. Resolution capabilities also vary, with Basic members restricted to 1080p maximum quality. This elaborate iQiyi membership over-monotization approach contrasts sharply with earlier years when members enjoyed broader benefits under simpler pricing.
User Experience Deterioration
The case of Ms. Xia from Chongqing illustrates how these policies impact actual users. As an avid viewer of iQiyi’s popular variety show “Hello Farming Youth” while her family follows “Silent Glory,” she discovered her Gold membership prevented simultaneous viewing on multiple devices. Additionally, accessing specific sports content required additional subscriptions or pay-per-view fees beyond her existing membership. “Paying for membership was supposed to guarantee a good viewing experience,” she commented. “Who knew memberships would be divided into hierarchical classes? iQiyi’s approach seems particularly aggressive.” Similar frustrations appear frequently on social media platforms like Xiaohongshu, where users criticize basic memberships that still include advertisements and restrictive device policies.
Advertising in Paid Subscriptions
Perhaps the most contentious aspect of iQiyi’s current strategy involves the persistence of advertising within paid membership tiers. While competitors typically remove ads for all paying subscribers, iQiyi maintains advertising across certain membership levels, creating what users perceive as a fundamental breach of the membership value proposition.
Comparative Analysis with Competitors
Among China’s major streaming platforms—often referred to as “You Ai Teng” for Youku, iQiyi, and Tencent Video—iQiyi stands alone in maintaining advertising within certain paid memberships. According to official iQiyi documentation, Basic members receive no ad-free privileges, while Gold, Platinum, and Star Diamond members save pre-roll ad time but may still encounter various ad formats. Crucially, these ad-saving benefits don’t extend to television or screencasting usage. By comparison, Youku and Tencent Video eliminate pre-roll ads completely for all VIP members. This distinction highlights how iQiyi membership over-monetization extends even to what many consider a core membership benefit.
Complaint Volume Evidence
User dissatisfaction with these policies manifests clearly in complaint data. On the consumer mediation platform Hei Mao Tou Su, searches for “iQiyi” yield 53,742 complaints, compared to 39,999 for Tencent Video and 45,798 for Youku. This places iQiyi at the top among the three major platforms for user grievances. The concentration of complaints around membership terms and advertising practices suggests that iQiyi membership over-monetization strategies are generating significant pushback from the user base.
Financial Performance Under Pressure
iQiyi’s aggressive monetization approaches coincide with concerning financial trends. Both annual and quarterly reports reveal declining revenues and profits across 2023 and 2024, suggesting that short-term extraction may be undermining longer-term sustainability.
Revenue and Profit Analysis
Historical financial data shows iQiyi generated 29.23 billion yuan in revenue for full-year 2023, representing an 8.31% year-over-year decrease. More alarmingly, net profit attributable to shareholders plummeted 60.32% to 764 million yuan. This downward trajectory accelerated in 2024, with first-quarter revenue falling 9.35% to 7.186 billion yuan and profit dropping 72.20% to 182 million yuan. The second quarter brought further deterioration, with revenue declining 10.9% to 6.628 billion yuan and the company recording a net loss of 134 million yuan—a dramatic reversal from profitability during the same period last year.
Core Business Contraction
The financial weakness stems from broad-based declines across iQiyi’s primary revenue streams. Membership service income dropped 8.33% year-over-year in Q1 2024 to 4.4 billion yuan, while online advertising revenue fell 10.41% to 1.33 billion yuan. Content distribution revenue experienced the sharpest decline at 32% to 629 million yuan. The second quarter showed continued pressure with membership service revenue down 9%, advertising revenue down 13%, and content distribution down 37%. Notably, these declines occurred despite reduced content costs and operating expenses, indicating that the iQiyi membership over-monetization approach may be driving user attrition rather than solving fundamental business challenges.
Market Implications and Strategic Crossroads
iQiyi’s current predicament reflects broader tensions in China’s streaming video industry. As platforms grapple with rising content costs and intensifying competition, the balance between user experience and monetization becomes increasingly delicate. iQiyi’s approach demonstrates the risks of prioritizing short-term revenue extraction over sustainable user relationships.
Expert Perspectives on Industry Dynamics
Industry observers note that iQiyi’s challenges extend beyond its immediate control. “The segmentation of VIP benefits and reduction of membership privileges essentially represents platforms mining users’ payment willingness and value to maximize commercial returns,” one industry analyst explained. “But this mining often comes at the expense of user experience.” The proliferation of short-form video and mini-drama content has further fragmented viewer attention, creating additional headwinds for traditional long-form platforms like iQiyi. While iQiyi has entered the short-content arena, its impact on reversing the iQiyi membership over-monetization trend remains limited in the near term.
Investment Considerations
For investors monitoring Chinese technology equities, iQiyi’s situation offers important lessons about business model sustainability. The company’s status as the only publicly traded entity among the “You Ai Teng” group makes its performance particularly indicative of sector health. The correlation between user complaint volumes, service quality issues, and financial deterioration suggests that platforms neglecting core user experience may face structural challenges. As one industry professional summarized: “When an internet platform begins disregarding users, what foundation remains for business recovery?”
Path Forward for Streaming Platforms
The convergence of regulatory attention, user dissatisfaction, and financial pressure creates a pivotal moment for iQiyi and similar platforms. Sustainable growth in China’s competitive streaming market requires recalibrating the balance between monetization and user value. Companies that transparently address service shortcomings while offering fair value across membership tiers will likely outperform those pursuing aggressive extraction strategies. For market participants, monitoring how iQiyi responds to these challenges—particularly whether it simplifies its membership structure and improves customer service—will provide crucial indicators of its recovery potential. The current iQiyi membership over-monetization approach serves as a cautionary tale about the limits of revenue optimization in user-dependent business models.