The story of Internetization has come to an end. How can TV manufacturers survive in 2018?

Because of the collapse of the Internet TV concept caused by the sudden collapse of LeTV, the TV industry, which relied on various concepts to survive, finally made all practitioners smell the unsettling atmosphere of survival crisis in 2017.

The two dark clouds hanging over the Internet TV industry are beginning to dissipate. One is sales volume, and the other is the power-on rate. Their simultaneous decline is becoming a noose around the neck of the industry. When the industry was on the rise, this noose was always treated as the invisible elephant in the room - the crisis is there, but everyone pretends it doesn't exist, and even imagines it as a wreath of honor because of self-admiration.

According to data from Aowei Cloud Network, TV sales in the first half of 2017 fell 11% year-on-year, with the retail scale of the color TV market in the third quarter reaching only 10.41 million units, down 12.9% year-on-year.

According to the latest 53rd week report on color TV retail analysis released by CMM, the cumulative retail sales and retail volume of the overall TV market in 2017 both showed negative growth year-on-year.

In addition to external factors such as weak demand, it is believed that the concept of Internet TV has encountered a growth ceiling. The decrease in incremental users is only an external factor. More internal factors lie in the fading willingness of users to pay and the shift in entertainment scenes in home living rooms. In a nutshell, the entertainment function of TV has long given way to mobile devices that are more flexible and applicable to more mainstream scenarios.

Who will take up the banner of the Internet TV industry?

Apart from various irreversible objective reasons, the once popular Internet TV itself also has the problem of "who will carry the banner".

In any industry or organization, who was the first to lament that the world had suffered for a long time under the Qin Dynasty? Who was the first to rise up and ask whether the kings, princes, generals and ministers were of the same race? Who could ask who was the best rival for the heroes in the world, Cao and Liu?

This is the process of pursuing order. Without this process, the final result would be the Hu horse crossing the Yinshan Mountains.

In 2017, when Internet TV brands lacked benchmarks and began to act independently, who benefited the most? In terms of sales, it was Sharp, a former Japanese brand from Taiwan Province.

Why did Sharp take the top spot in sales in 2017? In the past few years, Sharp has never been so successful. The reason is that Sharp took the initiative, but the main reason is that the original industry iron plate began to loosen, and Sharp took advantage of it and filled the gap by lowering its own price.

Why, after the collapse of LeTV, which had sold 10 million units in three years, no other competitor in the industry took the initiative to play the role of a leader?

Analysis shows that, on the one hand, it is because of the long-standing grievances between competitors and LeTV. In the past three or four years, LeTV has offended almost all the competitors it could in order to gain prominence. Even if they are honest with their bodies, they are unwilling to say so. On the other hand, the market has been educated, and everyone believes that the most urgent task is not how the industry is, but to build up their own fiefdoms first.

For example, Skyworth's Coocaa has its own style logic. The expansion of territory is its main demand at the moment, to make more friends and fewer enemies.

TCL's Thunderbird's internal relationships have not yet been straightened out, and it does not have the prerequisites for outward expansion at all.

Faced with the market space vacated by LeTV, the seed player Xiaomi TV has not shown enough impact, with limited increase in market share and insufficient strength.

However, Weijing, Fengxing and even Kanshang, which has a national team background, have more negative factors than positive factors such as layoffs and debts. They can only sigh helplessly that they have the will but not the ability.

On the other hand, traditional TV manufacturers are also having a hard time. Hisense Electric, the leader in the domestic TV market, only had a net profit of 600 million yuan for shareholders of listed companies in the first three quarters of 2017, a year-on-year drop of 47.39%.

Sichuan Changhong's third-quarter financial report showed that the company's net profit in the first three quarters was 167 million yuan, a year-on-year decrease of 68%.

So, with the industry now completely fragmented, will 2018 be any better?

Have the manufacturers who overdrawn from the Internet concept benefited from it?

A data worth noting is that as of June last year, the price of panels, which account for the main cost of TV production, has increased by about 40% during the same period, but the market price increase of TV terminals has not reached 20%, less than half of that of panels.

Some people call this longest wave of panel price increases in history the culprit that made TV manufacturers lose face last year. However, in my opinion, this is just a tragedy directed and performed by the manufacturers themselves. The manufacturers who are now lamenting the panel price increase are exactly the same group of manufacturers who turned their product profits into negative numbers. How can products with negative profits resist normal price fluctuations in the market?

In fact, the bigger problem facing the entire TV industry at present is that it has not been able to find scenarios and functions that can effectively stimulate market demand. Without demand, how can there be sales?

In the past few years, all TV industry practitioners have regarded the intelligent Internetization of large screens as the key direction for exploring new market demands, so that the difference between so-called Internet TV and traditional brand TV is no longer obvious. The final result of the TV industry's full efforts to go online is that it has not become a soft way to dilute hardware costs, but has indirectly reduced the audio-visual value of TV - in the past, the standard for judging TV was sound quality and picture quality. Under the influence of Internet standards, only a few absolutely high-end brands are now sticking to this bottom line.

Just as the sudden emergence of Xiaomi mobile phone has made people deeply rooted in the idea that "Android flagship mobile phones should only be sold for 1,999 yuan", every Internet TV brand has followed suit, focusing only on competing on price, forcing themselves to become loser machines, but completely forgetting Xiaomi's leadership in innovation. Price innovation is only part of it, and more hardware innovation, software innovation and other greater advantages have been selectively abandoned.

The emergence of Internet TV has made televisions cheaper, and hardware is not making money or even losing money, which has become the main means for the new generation of Internet TV brands to attract industry attention.

Unfortunately, the practice of continuously lowering prices not only broke through the pricing rules established by traditional TV manufacturers over decades, but also made it difficult for the PPTs of most Internet TV brands to win the favor and blood transfusion of the capital market in 2017 when the "LeTV concept" was no longer popular.

Admittedly, under the thinking of television internetization, the strategy of "hardware does not make money, software services make up for it" always makes sense. However, based on people's inherent understanding of television terminals and the current consumption habits of domestic users, the consumption behavior of paying for content is still in the exploration and development stage as all sectors of society ban pirated resources and gradually strengthen copyright awareness.

The Internetization of large screens advocates that users pay for content, which can be understood as a driving force for the healthy development of the film and television industry. However, if we try to use the money earned from services to pay for hardware at this moment, it may be a bit "taken for granted". What's more, the HDMI interface behind the TV gives users too much freedom of choice.

Looking ahead, TV brands’ exploration of service profitability is not limited to “selling movies”. Using TV as a new e-commerce channel to “sell goods” has also left many footprints for manufacturers. However, seeing that TV users have smartphones equipped with various shopping apps and mobile payment tools, TV manufacturers’ other strategies, including online shopping, seem to have failed to find the right direction.

Therefore, today's television industry is like a complex carrier that has basically tried all new things that can connect large screens with the Internet. Unfortunately, in the process of television terminals changing from display devices that simply compete in picture quality to more complex ones, the situation of television manufacturers has not improved.

In addition, whether it is traditional TV manufacturers or Internet TV brands, with the increasing maturity of smart TVs at this stage and the homogenization of content resources, the Internet, as a growth point in the industry, will no longer constitute a differentiating element in the competition among brands in the industry.

Just like the development of smartphones, a few years ago, people were still keen on discussing whose system UI was better, but in the past two years, what really promoted the mobile phone market were obviously hardware technology factors such as fast charging, dual cameras, and full screens.

After going around in the soil of the Internet, the television industry is in urgent need of finding the next foothold that can truly stimulate the market.

Screen revolution or artificial intelligence, which is the better pill for Internet TV?

It can be seen that in 2018, the multi-faceted upgrade and evolution of the screen itself is bringing new opportunities for the TV industry to turn around.

At the CES show at the beginning of the year, 8K and OLED technology, which is seen as about to become popular, dominated the booths of various TV manufacturers. The trend towards screenless TVs can also be seen in the product strategy changes of many Internet TV brands and the continuous launch of laser TVs by TV manufacturers.

The advantage of viewing the change of screen as a turning point in the television industry is that it directly constitutes a product change that consumers can actually feel intuitively, rather than the previous Internet-based television. No matter how many press conferences are held, others may not be able to understand what exactly has changed with this big screen.

However, the emergence of new technologies has put TV manufacturers in a position of raising the prices of their products for 8K, OLED and even laser TVs, while the current TV industry has been dragged into a low-price vicious circle by the development of the Internet.

New technologies have enabled television terminals to cater to the needs of consumption upgrades, but considering various reasons such as the service life and replacement cycle of TV products, and even the practicality of 8K resolution and ultra-large display size of laser TVs, the threshold for consumers to pay for them is still quite high.

Of course, using the product thinking of micro-projectors to create so-called screenless TVs is a smart approach taken by many Internet TV manufacturers in recent years. On the surface, these products are not priced too high, but they actually remove the screen and change the form of TV products, which can be said to be the best of both worlds.

But in fact, it is still too early for micro-projector screenless TVs to replace TVs due to reasons such as the brightness of LED light sources. Even the brand manager of Baofeng TV, which has recently focused on screenless TVs, recently publicly stated that in terms of actual display effects, traditional screen TVs are still irreplaceable in the mainstream market.

One of the main reasons why screenless TVs are favored by Internet TV brands is that compared with the traditional TV stock market with an annual sales scale of 50 million, the micro-projection field with similar data is only at the level of 3 million. It is an incremental market with room for growth. However, no one can say for sure how much room for growth there is after 3 million, and whether it is enough to attract enough traditional TV users to switch positions.

On the other hand, in addition to these changes in hardware and product form, the popularity of AI in the field of science and technology and the rise of artificial intelligence have also presented a new direction for the television industry in the "post-Internet" era, with a soft level that keeps up with the trend of the times.

When it comes to the application of artificial intelligence on TV, the main problem is that the concept of artificial intelligence seems fresh enough, but the artificial intelligence scenes on TV do not seem fresh enough.

Before the industry generally had a clear definition of artificial intelligence TV, most of consumers' understanding of TV artificial intelligence came not only from other types of products such as mobile phones and smart speakers. For example, Xiaomi TV's previous understanding of the content "waterfall flow" PatchWall was directly summarized as artificial intelligence TV, which seemed too thin and casual.

Since television has always been seen as an important interactive entrance to the future smart home center, its importance in the era of artificial intelligence is obvious. However, the television industry has just begun to think about what artificial intelligence television should and can do.

In today's technology industry, the failure of "Moore's Law" in chip manufacturing is imminent, and terminal equipment manufacturers often find it difficult to get rid of the situation where the upstream hardware is controlled by a few suppliers in a short period of time. Under the general trend of artificial intelligence driving smart life, the TV industry will shift from product hardware competition to software capability competition. The trend will become increasingly obvious.

TV manufacturers certainly have the first-mover advantage in bringing their products into home environments, but it is still unknown whether TV companies, which originated from hardware manufacturing, are ready to compete in software and even systems.

From this, it can be seen that the Internet TV industry still lacks sufficient conditions to fight back in 2018.

1. The problem of the screen revolution is to which users should the high-priced products born under this concept be sold, and whether they can be sold at all? At present, although the sales of TVs using new screens are increasing, the absolute number is negligible. Can it break through the balance point between demand and price? It is difficult to predict that the decision is not in the hands of TV manufacturers, but in the hands of upstream screen manufacturers and the yield rate of products.

2. Artificial intelligence is a new and unknown space for most TV manufacturers. It is a typical misaligned competition of using one's own weaknesses to compete with others' strengths. From chips to voice engines, no technology comes from the upstream and downstream of the TV industry, and there are too many places that are restricted by others. In addition, whether TV needs artificial intelligence or not is actually a question that consumers need to think about themselves. In a home environment, is a TV that can listen to the voices of the whole family more convenient or more frightening?

Internet TV in 2018 is very difficult, very difficult, very difficult. The difficulty lies in the lack of common goals, the weak market demand, and the confusion of looking around.

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.