(Yicai Global) Nov. 18 -- Shares in iQiyi tanked 17.23 percent yesterday after the Chinese long-form video platform reported that third-quarter losses had widened 41.7 percent due to increased spending on original content and intense competition from short video platforms.

iQiyi’s share price [NASDAQ:IQ] finished the day at USD7.11 yesterday.

The firm’s losses reached CNY1.7 billion (USD268.4 million) in the three months ended Sept. 30, according to the Beijing-based firm’s latest earnings report released yesterday. Revenue was up 6 percent to CNY7.6 billion (USD1.2 billion) driven by a greater number of subscribers, more online adverts and better content distribution services.

"During the third quarter, we experienced significant uncertainty in terms of content scheduling, which resulted in softer than expected top-line performance,” said founder and Chief Executive Officer Gong Yu.

There is a shortage of content in the whole long-form video industry, with around one third less dramas than usual due to the impact of Covid-19, Gong said. Short videos have become more popular.

Cost of revenues, which mainly includes the cost of content, was up 10 percent to CNY7 billion (USD1 billion).

“However, we are seeing a promising growth trajectory for our new initiatives, such as iQiyi Lite, and our overseas business,” Gong said. “We will continue to take the lead in rolling out new intelligent production capabilities and driving the industrialization of the long-form video production process, which will help to further optimize our operating efficiency,” he added.

For the fourth quarter, the Beijing-based firm is anticipating revenue of as much as USD1.17 billion, which would represent a 1 percent year on year growth.

Editor: Kim Taylor