Cable TV has a declining number of users every year. Can 5G+8K really change its fate?

Yesterday, I made a decision and went to Gehua Cable to shut down my service, saying goodbye to the cable TV that had been with me for nearly fifteen years.

The reason for this decision is not difficult to understand. Except for watching the news and weather forecast at dinner time, the TV is hardly turned on at home, so the TV fee of 18 yuan per month seems unnecessary.

After making this decision, I asked around my friends and found that most of them basically don’t watch TV anymore, or at least don’t watch cable TV.

Is the cable TV market shrinking rapidly? There are already countless data to prove this, but for me, starting from yesterday, I really said goodbye to cable TV.

Young people still watch TV, but not cable TV

Is cable TV in China facing difficulties? Judging from the data, it is indeed the case.

According to the 2020 National Radio and Television Industry Statistical Bulletin released by the State Administration of Radio, Film and Television, in 2020, the actual number of cable TV users nationwide was 207 million, the same as in 2019 and 5.05% lower than in 2018. Although cable TV network revenue reached 75.698 billion yuan, a year-on-year increase of 0.48%, the revenue from traditional cable TV services such as viewing maintenance fees, paid digital TV, and landing fees was only 52.061 billion yuan, a year-on-year decrease of 18.30%. The "viewing maintenance fee" refers to the fee that must be paid every month after installing the set-top box. From the decline in this figure, it can be seen that the number of cable TV users is indeed gradually decreasing.

In the context of the overall sluggish market, major companies involved in the cable TV business are naturally not immune. Gehua Cable's 2020 financial report shows that the company's operating income last year was 2.575 billion yuan, a year-on-year decline of 6.64%. CITIC Guoan's financial report also shows that in 2020, the company's cable TV business was 107 million yuan, a decrease of 58.69% from the same period last year.

In contrast, the overall TV market is improving.

Since last year, affected by the stay-at-home trend brought on by the epidemic, television has re-entered people's field of vision. According to statistics from Gouzheng Data, in March 2021, the daily active rate of smart TVs reached 48%, and the average daily usage time exceeded 6 hours.

The "2020 Smart TV Large Screen Viewing Insight Report" released by CSM shows that the average viewing time of large-screen TVs has increased significantly in the past year, and the average monthly large-screen reach rate of OTT viewers has reached more than 85%. In addition, most OTT users are people born in the 1980s and 1990s who have higher consumption willingness and ability.

The decline of television in the past few years has a lot to do with the amount of content. With the rise of the Internet, entertainment content has increased day by day, and users have a wealth of choices, while cable TV is still at the stage of "you watch what I provide", and naturally it has been gradually replaced by mobile phones, computers and other terminals.

However, with the popularity of smart TVs, more and more Internet content can be viewed on TV, which makes up for the shortcomings of TV in terms of content. Moreover, compared with mobile phones, computers and other devices, large-screen TVs have incomparable advantages in creating viewing experience and atmosphere, which makes them occupy a more advantageous position in the new round of competition.

Data released by iQiyi show that in the first quarter of 2021, the number of monthly active users of iQiyi's large-screen terminals increased by 41% compared with the same period in 2019, traffic increased by 35%, and the total playback time on the large-screen terminal exceeded that on the mobile terminal.

In fact, the main driving force behind the resurgence of television still comes from the Internet. However, cable television has not only failed to enjoy the dividends of the development of the Internet, but has been hit hard by the latter.

The "Cable TV Industry Research" released by United Credit Rating mentioned that the main sources of income for cable TV companies include value-added services and broadband services in addition to basic viewing and installation fees.

Value-added services mainly include paid channels and interactive on-demand services, but compared with online video platforms, cable TV value-added services have no advantages in terms of content quantity, viewing convenience, or tariffs. Broadband services have to face competition from the three major operators, and their development space is also very limited. It can be seen that value-added services and broadband services, which were expected to be growth points, have "collided" with the Internet to varying degrees and have been easily blocked by the latter, making it difficult for them to develop further.

On the other hand, the clarity of film and television resources is also a major shortcoming of cable TV.

Today's online video platforms have begun to promote 4K resources, and 4K and even 8K resolutions have become standard for new TVs. But cable TV has not kept up with this trend. As of the end of March 2021, there were only seven 4K ultra-clear channels in China, one of which was from China Central Television and the other six were local stations. There is still a lot of room for improvement in the number of 4K channels and 4K video content.

Another service that has had a huge impact on cable TV is IPTV, which stands for Internet Protocol Television. IPTV can provide a variety of digital media services including TV programs through Internet protocols, and users can watch the content through terminals such as TVs, PCs, and mobile devices.

IPTV services are provided by China Mobile, China Unicom and China Telecom, the three major operators. Their huge user base provides IPTV with unique resource advantages. Compared with cable TV, IPTV is transmitted through telecommunications broadband networks, which has bandwidth advantages, and it also actively responds to the "speed increase and fee reduction" policy proposed by the country, which further enhances the competitiveness of IPTV.

The "China Communications Industry Statistical Bulletin" released by the Ministry of Industry and Information Technology shows that as of the end of 2020, the number of IPTV users nationwide reached 315 million, with a net increase of 21.2 million throughout the year.

Under the double pressure from Internet TV and IPTV, the cable TV industry has officially entered a period of negative growth since 2017 and has been struggling.

New opportunities for 5G+8K

In 2016, the Central Propaganda Department, the Ministry of Finance and the State Administration of Radio, Film and Television jointly issued the "Opinions on Accelerating the Integration and Development of the National Cable TV Network", proposing to accelerate the integration of the national cable network and realize "one network across the country" by 2020, further enhance network business innovation and development capabilities, and solve the current difficulties of decentralized operations and user loss.

In February last year, the "National Cable TV Network Integration and Development Implementation Plan" issued by the Central Propaganda Department and other departments mentioned that we should take 5G construction as an opportunity to promote the integration and development of the national cable TV network.

In October last year, China Radio and Television Network Co., Ltd. was officially established by ten companies including China Gehua Cable, Wasu Media, and China Media Group through cash and equity investment. It became the fourth largest network operator in China, marking the official establishment of the "One Network Nationwide" platform.

The scale of integrated radio and television network users exceeds 200 million, which has a significant advantage in user resources. At the same time, the advent of the 5G era has also driven the development of ultra-high-definition video services, and China Radio and Television holds a 5G license for the 700MHz frequency band, allowing it to take the lead in using 5G to drive the development of cable television.

8K is also expected to become a new growth point for cable TV.

Last year, CCTV achieved real-time coverage of the two sessions using 5G+8K. In February this year, CCTV's 8K channel was officially launched, and 8K live broadcast of the Spring Festival Gala was achieved. It is expected that in 2022, CCTV's 8K channel will develop into a comprehensive channel covering news, documentaries, cultural education, film and television entertainment, sports events and other comprehensive programs.

As a public channel, CCTV's 8K channel only requires users to pay basic cable TV maintenance fees to watch, and more public ultra-high-definition channels are also under construction. On May 7, China Central Radio and Television officially launched the construction of an 8K ultra-high-definition TV public service platform to carry out 8K program production, channel broadcasting, signal distribution and other work. If cable TV can allow more users to watch more 8K channels without paying extra in the early stages of 8K development, it will undoubtedly lay a solid user base for it before the official arrival of the 8K era.

In the 4K era, the development of cable TV has obviously lagged behind others. In the pre-8K era, cable TV seems to have taken a small lead. As for whether it can make a comeback in the 8K era, we can only wait and see.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.