Quasi-unicorn Thunderbird Technology's net profit surged 88%, with multi-dimensional long-term layout becoming the key to its growth

The mobile Internet dividend has entered a period of slow decline, and terminal shipments have fallen for three consecutive years. The large-screen Internet has taken over part of the traffic and has been advancing by leaps and bounds with the support of concepts such as 5G, AI, and IoT. The specific manifestation is that the development of China's OTT market has begun to enter the fast lane. According to data from Aowei Interactive Entertainment, the annual compound growth rate of China's OTT market size will reach 43% from 2019 to 2023.

During the epidemic, the OTT industry has been booming. According to Gouzheng data, during the Spring Festival, the daily active rate of smart TVs in China was 52%, a year-on-year increase of 15.6%, and the average daily viewing time exceeded 6 hours. QuestMobile data shows that the average daily usage time of Chinese mobile phone users is only 6.2 hours, and the growth rate has slowed down significantly.

As one sector grows while the other shrinks, the potential of the OTT industry is waiting to be unleashed, and a trillion-dollar OTT market is about to emerge.

The rising industry trend does not represent the development trend of independent enterprises. Therefore, if we want to get a glimpse of the development direction of the OTT industry, we must combine OTT enterprises whose data in various aspects are above the industry average as samples, because this not only indicates that the OTT enterprise has entered the right track of steady development, but also represents the leading role played by the enterprise in the industry.

Recently, TCL Electronics (01070.HK) released its 2020 first half financial report. Its Internet technology company Thunderbird Technology's total revenue in the first half of the year was HK$400 million, a year-on-year increase of 60%; net profit increased by 88.0% year-on-year, and the net profit margin was as high as 36.7%. As of the first half of the year, the average daily user time increased to 6.14 hours, of which the average daily user time during the Spring Festival was as high as 7.9 hours, which not only exceeded the average level of the OTT industry, but also exceeded the average usage time of 6.8 hours per person on mobile terminals.

As a quasi-unicorn company in the OTT industry, the high growth rate of LeTV Technology in recent years has led to a high-frequency discussion in the industry, that is, what kind of enlightenment will LeTV's high growth bring to the OTT industry?

In the post-epidemic era, Thunderbird Technology's data is still eye-catching. Analysts said that this is mainly because Thunderbird Technology has explored the concept of product iteration and boundary expansion centered on user needs, as well as the data-driven model that Thunderbird Technology has been pursuing and implementing.

This coincides with the previous judgment of Li Hongwei, CEO of Thunderbird Technology, and can even be considered the "growth code" of Thunderbird Technology to some extent.

Li Hongwei believes that "large-screen Internet companies need to explore diversified innovative businesses while developing OTT large-screen businesses. This is a key factor in determining whether the user scale can continue to grow, and it is also one of the foundations for the long-term development of large-screen Internet companies."

The secret of Thunderbird's flapping wings is to expand boundaries while maintaining its position, and use diversified innovation as the flywheel to drive growth.

Taking Thunderbird's layout at the content level as an example, consumers use OTT large screens mainly because large screens can bring the ultimate "audio and video" experience. However, when short videos came, 773 million of the 850 million long video users became short video users. The overlap of user portraits means differentiation in content. "Realizing the combination of long and short videos, grabbing the user time and exploration time" has become one of the latest growth points that Thunderbird has noticed.

In response to this trend, Thunderbird Technology took the lead in the OTT industry to reach cooperation with short video platforms such as Kuaishou, making its own OTT large screen a big stage for short video content. In fact, Thunderbird's ability to maintain sustained high growth is inseparable from the construction of high-viscosity content.

More importantly, in addition to actively expanding content coverage, considering that 5G networks and 4K TVs are gradually becoming the mainstream of the market, Thunderbird Technology has decisively upgraded in the field of long videos, breaking through user expectations from the high-definition dimension, and striving to cultivate users' usage habits for 4K long videos. The first to launch 4K, Dolby and other high-quality ultra-high-definition content has also brought a large number of solid high-definition fans to Thunderbird Technology.

Having a rich content library is actually just the foundation for LeTV Technology to move forward. Actively connecting content with users through AI and big data is the key to LeTV Technology's leading position in the industry.

How to make broad content find users with different needs? The AI ​​computing power of Thunderbird Technology plays a decisive role in this, realizing instant and concurrent "one thousand faces" content recommendations. For example, when the system calculates that a user likes to watch comedy movies, it will push film and television content with relevant tags to the user. Data shows that the user conversion rate of Thunderbird platform content has doubled due to the AI ​​recommendation algorithm.

In addition to film and television, in other aspects, Thunderbird is also constantly aware of user needs in order to provide better services to users.

At the beginning of the cloud gaming market, Thunderbird started a long-term layout. Not long ago, Thunderbird Technology once again took the lead in the industry and announced that it would join hands with service providers such as Tianyi Cloud Games, NetEase Cloud Games, and Migu Quick Games to launch cloud gaming functions on tens of millions of Thunderbird terminals.

According to data released by Niko Partners, in 2018, console games accounted for only 0.7% of the total revenue of the gaming industry in China. However, with the explosion of cloud gaming, the number of console and TV game players in China will reach 24.37 million in 2022. Thunderbird's cloud gaming platform can use its own advantages to cover these users first, and then attract more high-net-worth hardcore gamers as the games and platforms improve.

On the one hand, the content library is constantly enriched, and on the other hand, it is closely connected with users through technology. The combined effect of these two factors shows that in the first half of 2020, LeTV Technology's membership revenue increased by 76.6% year-on-year, value-added business revenue increased by 136.5% year-on-year, existing membership increased by 63.1% year-on-year, and ARPU value increased by 28.8% year-on-year.

This is a harvest season for Thunderbird and also a season of progress for the OTT industry.

Part of the reason why Thunderbird Technology has become a quasi-unicorn company is of course due to various impressive data. More importantly, Thunderbird Technology has also put forward a clear vision and plan for the future - it is not satisfied with the current achievements in the "big screen". On the contrary, the "big screen" is only a phased goal of Thunderbird. On top of this, Thunderbird Technology wants to build a solution that can make families around the world happier.

In fact, the concept of Thunderbird Technology is similar to the platform-based apps in the mobile Internet era. For example, WeChat was originally just a communication tool, but as its traffic became more and more stable, Tencent actively improved its functions and began to expand more functions such as financial management, reading, and games in WeChat. It also actively deployed overseas and became the information circulation center for Chinese people around the world. In this sense, Thunderbird wants to build exactly what WeChat has already done - providing a package of solutions for global users.

Similar to WeChat, LeTV Technology also has two aspects of coordinated development at the macro-strategic level.

First, in order to try to attract more users, Thunderbird Technology has frequently expanded its product lines. For example, the Thunderbird Alliance established by Thunderbird in August 2019 has expanded non-TCL brand hardware terminals such as TV, OTT boxes, and smart projectors with its partners. In the next three years, the Thunderbird Alliance's goal for activated terminals is to exceed 10 million units, and the upward trend will continue in the future.

In order to make families around the world happier, Thunderbird also launched the TCL Channel product in 2019. The financial report shows that in the first half of 2020, TCL Channel has been launched in 8 countries including India, Vietnam, and Japan. Thunderbird Technology also has in-depth cooperation with global leading streaming content platforms such as Roku and Google, and plans to provide localized content services to millions of American users.

On the other hand, at the level of "overall solution", Thunderbird Technology also has a deep insight into consumer needs and the advantages of OTT as a natural screen, and has found two major directions in addition to video content: local life services and big health services in family scenarios.

Taking the world's first TCL 5G 8K smart screen released by TCL in August 2020 as an example, it will be equipped with the big health services provided by Thunderbird Technology, and plans to launch functions such as remote consultation, online drug purchase, voice registration, and health management in the future.

Correspondingly, in order to allow users on the platform to more conveniently connect with service businesses in home scenarios other than video content, LeTV Technology is also gradually building a complete membership system based on the existing film and television membership services. With just one account, users can use integrated solutions such as online services, home services, and physical consumption.

It can be said that by expanding coverage horizontally and exploring the value of OTT large screens vertically, Thunderbird Technology has established a scenario-based OTT ecosystem that is different from the traditional one and based on content services. In fact, under the layout of Thunderbird, an OTT long-termist, there are extremely careful deployments, whether it is consolidating existing businesses and traffic or expanding coverage and functional layers. Therefore, in the foreseeable future, Thunderbird Technology, a "quasi-unicorn", is more likely to become the "leader" of the OTT industry.

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.