China's TV market has entered a saturation stage and the growth rate has slowed down. In 2016, China's TV shipments were 50.89 million units, up 7.8% year-on-year, while LeTV’s pioneering Internet TV market enjoyed rapid growth. LeTV TV shipments It has reached about 6 million times more than the same period of last year, and is close to half of Hisense, the largest TV brand in China.
LeTV emphasizes the value-for-money, and the revenue-subsidizing hardware obtained through TV-borne advertisements and Internet video content has caused a great impact on the domestic TV market. Inspired by LeTV, traditional television brands Hisense, TCL, and Skyworth launched their Internet TV brands. This led to a 1.8% drop in sales in the Chinese TV market in 2016 when shipments increased.
At the same time, the panel prices that accounted for the bulk of the cost of LCD TVs have continued to rise in the past two years, resulting in the decline in the profits of the two domestic TV brands, Hisense and TCL. Hisense’s profit decreased by 49.53% year-on-year in 2016, and TCL Group’s profits decreased by 38% year-on-year. %. In addition, Hon Hai of Taiwan, after purchasing Sharp, cut prices of Sharp TV by 20%-30% and seized TV market share in the Chinese market. In the first quarter of this year, it was alleged that the shipment volume increased by 50%, which also gave domestic TV. Bringing tremendous pressure, in this case LeTV developed the Internet TV model to be valued by these traditional TV brands.
In addition to TCL owning its own panel production line, other TV companies are using TV panels purchased from outside. From the comparison of profit between Hisense and TCL, it can be seen that TCL has better control due to its own panel production line. The cost is therefore lower than Hisense's margin of decline, and the development of Internet business can partially offset the impact of rising panel costs. However, traditional TV companies lack the Internet content and cooperate with Internet companies to obtain rich content.
Internet companies in China are also actively investing in Internet TV. In addition to investing in the above-mentioned Coolo and Thunderbirds, Tencent has also invested in the Internet whale company's micro whale, and another Internet giant Alibaba has also invested in micro whale, the video industry giant. An iQiyi company has invested 150 million yuan to invest in Coocaa, which accounts for 5% of shares. It can be said that several domestic Internet companies have joined the domestic Internet TV battlefield.
Recently, according to sources, the impact of Internet TV-Letro TV due to various reasons has seen negative growth in the first half of this year. Under such favorable circumstances, traditional TV companies are certainly happy to take the opportunity to grab market share. Compared to LeTV, these Internet TV brands, Coocaa and Thunderbird, which rely on traditional domestic top two TV companies, have accumulated a huge number of users. According to the data released by Coolo and Thunderbird respectively, The cumulative number of users activated on the platform has reached 20 million, which exceeds the cumulative sales of LeTV. Internet companies that have access to these Internet TV companies can immediately access their Internet TV platforms and receive revenue.
After several years of development, domestic video companies have been difficult to make profit due to the extremely high copyright costs. In addition to the profitable status of LeTV, which was acquired as a result of the early acquisition of copyrighted copyrighted video content copyrights, the financial disclosure of Youku potatoes prior to privatization The data shows that the cost of copyright accounts for nearly half of its revenue and has been losing money. Of course, they also hope to increase revenue by acquiring more users.
After Internet companies such as Tencent and traditional TV companies have cooperated, Internet TV boss LeTV will face a huge challenge this year. It will face the question of whether it wants to gain market share or profits. It will be even more difficult to achieve profitability this year. Of course, Thunderbird is a good thing. They can take advantage of the current favorable timing to seize market share.
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