Where are the new market opportunities for OTT? Coocaa Network says: Any screen can be operated

The OTT big-screen era has quietly begun, and on the eve of the charge towards the first 10 billion market size, how the industry, which has been accumulating strength for a long time, will continue to develop has become an unavoidable choice facing many manufacturers.

On August 25, together with industry experts such as Xing Kaiyun, Chief of Communications and Computer at Western Securities, and Dong Min, Deputy Secretary-General of the China Electronic Video Industry Association, we invited Coocaa Network, a representative company in the OTT industry, to have an in-depth discussion on the issue. In the detailed analysis of Xing Yan, Assistant CEO/Brand Director of Coocaa Network, a high-quality discussion on the relationship between users and the industry outlined a clear future for OTT.

The continued growth of TV sales has laid the foundation for the upward development of OTT

When talking about OTT, TV terminals are indispensable. Although the shipment volume of smart TVs has been rising steadily since 2013, the Chinese smart TV market has now entered an era of slow growth as the market becomes saturated. IDC data predicts that the shipment volume of China's smart TV market will be 44.81 million units in 2020, a year-on-year decrease of 4.4%.

This trend is quite similar to the shipment curve of smartphones. However, it is worth noting that unlike mobile phones, which have entered a flat period, smart TVs are undergoing a complete transformation.

Ten years ago, the average size of a Chinese household's TV was only 40 inches, but by 2019, the average size of a Chinese TV had reached 50 inches. From an industry perspective, although the overall sales volume of Chinese TV products has fallen by 27% this year, the ultra-large-screen TV market has maintained a growth rate of more than 30%.

Dong Min, deputy secretary-general of the China Electronic Video Industry Association, believes: "This trend in the smart TV industry is a stage of continuous accumulation. The high rise in the market segment in 2020 is an inevitable trend in the development of the industry, indicating that the industry is about to enter a new cycle of rebirth."

From the perspective of the global market, as the domestic market gradually becomes saturated, Chinese manufacturers with full industry chain advantages have also begun to go overseas and occupy an absolute market position in the global smart TV market. According to IHS Markit data, in 2019, three of the top five smart TV manufacturers in the world were Chinese manufacturers.

Dong Min said: "Due to the advantages at the supply chain level and because smart TV manufacturers have seen incremental space in operations, there is huge room for imagination for China's color TV in the future, whether it is the voice in the global market or operational data."

Therefore, when we re-examine the TV, the most important terminal carrier of OTT, we can find that smart TV is always growing and there will always be a certain amount of incremental space. The "economic foundation" of smart TV also determines that the ceiling of OTT, the "superstructure", is destined not to be easily reached. According to statistics, the annual compound growth rate of China's OTT market size is expected to reach 43% by 2023, and OTT will become China's next large market with a scale of 100 billion.

Coocaa Network sees clear value beyond trends

Of course, the overall industry trend cannot represent the performance of an isolated company. For example, in the mid-term rise of the smartphone industry, only Huawei managed to reach the top of the "China Cool Alliance". Therefore, when we look at the entire OTT industry, the overall trend is important, but the individual performance of the company is more important.

According to Skyworth Group's financial report, Coocaa Network's total revenue in 2019 was 826 million yuan, a year-on-year increase of 50.2%. By the end of 2019, the number of terminals activated by the Coocaa system reached 44.3 million. During the Spring Festival, the average daily power-on time of Coocaa Network OTT users reached 7.5 hours. During the same period, the average daily usage time of mobile terminals was only 6.8 hours.

In this regard, Xing Yan, Assistant CEO/Brand Director of Coocaa Network Technology Co., Ltd., said: "In an era where low prices are the norm, operations are actually the key to breaking through in the smart TV industry."

The reason why Coocaa Network can present such impressive data is not only because it seized the opportunity and started to work in the OTT industry in 2010, but the more important factor is that Coocaa Network realized early on that users are the foundation of OTT. Therefore, it "expanded capacity" on the one hand and "consolidated" on the other hand, and built a virtuous cycle of OTT ecology in ten years.

The industry generally believes that the first boom of China's OTT industry was in 2014. Coocaa Network saw the service attributes of the OTT industry, so it officially declared independence at the end of that year and became an Internet company focusing on system development and user operations.

Coocaa Network has transformed itself into an Internet company with all its strength. This product logic, which is the first of its kind in the industry, has greatly expanded the coverage of the Coocaa system. Xing Yan said: "In addition to being integrated into Skyworth TVs, the Coocaa system also serves external brands such as Philips, Panasonic, and Panda, as well as set-top boxes of Jiangsu Radio and Television, Sichuan Radio and Television, and Hebei Radio and Television. Currently, the total number of Coocaa system activations has actually exceeded 60 million." By cross-comparing the financial report data, we can find that it is precisely because of the emancipation of the mind that Coocaa Network has gained more than 10 million operational devices compared to its competitors.

From this perspective, Coocaa Network's approach is similar to Google's focus on Android system services when mobile Internet was emerging - there is no need to stick to the number of own-brand terminals, and empowering more brands is the system-level dimensional upgrading strategy.

After expanding the traffic pool, Coocaa Network did not stop there, because traffic must be connected with content to achieve an ecological closed loop. Therefore, Coocaa Network began to promote a refined operation strategy. In simple terms, it is to deeply understand the user's demand for content, and then through the expansion of the content library and application technology, let the user and content, marketing are highly connected.

Taking the first half of 2020 as an example, due to the impact of the epidemic, most students could not go to school as scheduled. Considering the strong demand of students' parents, Coocaa Network launched an education topic in a timely manner. According to data from the Coocaa Network Large Screen Index Research Institute, during the Spring Festival, more than 10 million families received Coocaa system education VIP, and the total online education live broadcast viewing time exceeded 1.7 million hours, which is equivalent to nearly 2.6 million classes for students across the country.

Considering that different users have different content needs, Coocaa Network also uses full video operations to intelligently detect user preferences and provide targeted content recommendations for thousands of screens, greatly improving the conversion rate of related content. In this link, Coocaa can also push different customized marketing content to families with different needs through the original DMP data management platform. This refined operation can not only firmly attract users, but also actively improve the marketing efficiency of advertisers, and Coocaa Network itself can also gain a "50% growth rate" in revenue, perfectly achieving a win-win situation for all three parties.

Xing Yan believes: "The industry's current understanding of OTT operations is still traditional, and Coocaa Network has become a representative company in the industry precisely because it has avoided this inertial thinking."

Conclusion

In 2020, for most industries, an "epidemic" is a "winter". However, the OTT industry, which focuses on the "living room economy", has ushered in a deepening of value. Although the OTT industry still needs to be regulated in terms of price, channels, etc., considering that the dividends of smart TVs still exist, the development of technologies such as 5G, AI, and IoT, and the active empowerment of these technologies, OTT, as a new media form and a new container for content marketing, will surely generate endless imagination.

Combining the rapid growth of Coocaa Network and its deep understanding of the value of OTT, it is not difficult to see that the strong rise of Coocaa Network is certainly due to its advantage of seizing the initiative, but more importantly, it is because Coocaa Network focuses on OTT and has developed a new relationship between OTT services and terminals. As Xing Yan said: "Coocaa Network can serve large screens in conference rooms and large screens in cars. In other words, in the future, wherever there is a "screen", it will be where the Coocaa system touches."

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.