Baofeng TV received an investment of 800 million yuan. Can the former "Little LeTV" break through the Internet TV market?

2017 was not a easy year for the Internet TV industry.

After the collapse of LeEco, which had been advancing all the way, other Internet TV brands have been facing multiple pressures such as rising production costs, shrinking market sales, and people's pessimism about the concept of Internet TV due to LeEco's brand changes. Even at the end of the year, there were constant rumors of layoffs and bankruptcies in many companies.

Therefore, under such an industry situation, on December 7, Baofeng TV officially announced the news that it had received a strategic investment of 800 million yuan, which is an exciting news for the entire Internet TV industry.

You know, Baofeng, which was once called "Little LeTV" by industry insiders, not only chose to make drastic changes in its Internet TV business like LeTV, but also successfully staged the miracle of "55 daily limit increases in a year" in the capital market.

So, after getting 800 million yuan, can Baofeng TV become a game-changer in the current Internet TV market?

Market sales pick up, AI becomes the key to TV business profitability

At the 2017 mid-year earnings conference, Feng Xin, CEO of Baofeng Group, restated the company's future strategy as "AI + two screens", which means on the one hand, making a comprehensive bet on artificial intelligence and using AI to create information flow services; on the other hand, focusing on the two screens of VR and TV and striving to lead the industry.

At the strategic communication meeting on December 7, when Feng Xin talked about the three key points of Baofeng Group in 2018, he once again placed "AI + two screens" in a particularly important position, saying that the two screens of VR and TV will accelerate the arrival of the harvest period of Baofeng Group, and AI will become the engine of Baofeng's entire business.

Feng Xin directly regards Internet TV as a large-screen version of the iPhone. He believes that there is still huge market space for the TV business. The speed of reducing product losses is accelerating, which will lead to the healthy development of the main business. After the company's profits bottomed out and rebounded in 2017, it will usher in sustained growth in 2018.

According to the financial report released by Baofeng Group, the revenue in the third quarter of this year was 448 million yuan, an increase of 11% year-on-year. The net profit attributable to shareholders of listed companies in the third quarter was 4.51 million yuan, an increase of 826% year-on-year.

At the same time, Baofeng Group CFO Jiang Hao said that in the first three quarters of this year, the sales volume of Baofeng TV products was 550,000 units, with sales volume in the first, second and third quarters being 235,000 units, 115,000 units and 200,000 units respectively, showing signs of market recovery.

As for AI, Baofeng TV released its first far-speaker voice artificial intelligence TV X5 ECHO as early as May this year, and launched the AI2.0 artificial intelligence system in September. At present, it continues to come up with strategies such as "AI+content" and "AI+advertising" to build the internal driving force for coordinating the development of various terminal products.

For example, in content construction, AI can redefine the content library and content recommendation engine based on the three levels of content understanding, production, and organization, and then construct a more accurate user portrait and achieve precise reach of advertising on screens such as TV.

On the other hand, with the help of AI technology, advertising can be more effectively integrated into multi-dimensional content scenarios, while empowering multiple upstream and downstream links of products such as services, operations, retail, and supply chain integration.

Liu Yaoping, CEO of Baofeng TV, disclosed that Baofeng TV's goal for 2018 is to achieve the "101 Plan", which is to maintain the top position in AI TV and AI screenless TV market share and achieve single-user break-even. Feng Xin also proposed that Baofeng TV should achieve profitability in 2019.

It can be seen from this that it is not only necessary to make no losses in the TV business as soon as possible, but how AI technology can be based on content and find sustainable growth points in large-screen advertising, service operations and other directions will also become the key to whether Baofeng TV can make profits.

With an investment of 800 million yuan in place, what challenges will Baofeng TV still face in the future?

It is worth mentioning that Baofeng TV has officially signed an investment agreement with Dongshan Precision and Rudong Xinhao. In addition to obtaining financial support of 800 million yuan in strategic investment, it will also focus on TV business and cooperate with the two investors.

Yuan Yonggang, chairman of Dongshan Precision, said that he would fully support Baofeng TV and accelerate the development of Baofeng TV by relying on his manufacturing, supply chain, key modules and device capabilities; Zhai Jianhua, secretary of the Party Working Committee of Rudong Development Zone, also revealed that he would take Baofeng TV as the leader to build an AI TV industry base in Rudong to drive the development of the upstream and downstream economies of the AI ​​TV industry chain.

However, the problems in the upstream industrial chain have been solved one after another, and how to open up the downstream consumer-oriented market more efficiently has become a new hurdle for the development of Baofeng TV.

On the one hand, ordinary users' awareness of the Baofeng brand is still at the initial level of PC audio and video playback software. As a television business, Baofeng TV is difficult to gather enough product influence, which will cause the brand to encounter sales growth bottlenecks ahead of time.

On the other hand, at this stage, AI features can hardly be seen as the main attraction to stimulate consumers to buy or update TV products. Although the emergence of concepts such as "Baofeng Big Ears" has promoted the further development of TV intelligent scenarios such as voice operation, it has not actually hit the user's pain points. Relying on Baofeng's relatively low annual sales volume and status in the TV industry, it is difficult to promote the formation of new user habits.

Of course, Baofeng TV is still actively developing new product forms including screenless TVs, but it should be noted that, as previously stated in the article "Is the survival of Internet TV brands in micro-projectors escaping from the Red Ocean or jumping into the Dead Sea?", it is also difficult for Internet TV brands to achieve ideal results by focusing on screenless devices in the short term.

On the whole, the reason why Baofeng TV received an investment of 800 million yuan this time is obviously not because of the industry capital's recognition of the interim achievements of Baofeng's TV business, but it should be understood that the industry capital has given Baofeng a new opportunity to extend its runway in the TV business. As for whether Baofeng TV can seize this opportunity and become a game-changer in the field of Internet TV, which is currently showing a downward trend, it seems that there is still a long way to go.

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.