A cruel fact: it is not television that is declining, but the backward television business model!

Introduction: It is not television that is declining, but the backward television business model! The traditional television business model of "making programs and selling advertisements" is accelerating its decline. However, as the "home entrance" in the intelligent era, the value of television has not yet been tapped. Only by upgrading from the "highway" model to the "community" model can television be "reborn from the ashes".

It's the investment promotion season again. Advertising is like a barometer, affecting the mood of radio and television people.

In recent years, as advertising revenue continues to decline, the direction of television has been a focus of debate. Some people believe that "television is dead", while others refute that "the biggest conspiracy in China's media industry is to criticize television". Some people say "I don't know whether newspapers will die, but television will definitely not die", and some people even say with ulterior motives that "some second- and third-tier satellite TV stations have already had zero ratings". Articles that criticize and counter criticize often swipe the WeChat Moments, irritating the sensitive nerves of the television industry and stirring up the complex emotions of television people.

In fact, "pessimism" and "counter-pessimism" are false propositions, because it is not television that is declining, but the backward television business model.

1. The tradition of “making programs and selling advertisements”

The TV business model is declining rapidly

In recent years, under the severe impact of new media, the channel monopoly advantage of TV stations has disappeared. With the loss of audiences and the decline of advertising, most TV stations are facing the development difficulties of declining advertising revenue, increasing operating costs (rigid increase in headcount fees, program fees, equipment fees and various management costs), and the loss of core talents.

Under the "four-level management system", there are more than 1,300 radio and television stations across the country, with duplicate coverage, duplicate production, and duplicate investment, resulting in serious overcapacity. As industry competition has gone from fierce to brutal, TV stations are facing multiple competitions from central, provincial, municipal, and county stations in terms of channels, audiences, programs, customers, and resources, in addition to the diversion of new media. Most TV stations' advertising revenues have fallen sharply. Under the traditional idea of ​​"making programs and selling advertisements", TV station operations have fallen into a vicious cycle.

The market size is declining and the advertising space is getting smaller

The local advertising market is a "hard constraint" for the development of most TV stations. For most TV stations, due to the limited local economic scale, local advertisers are relatively weak. Under the pressure of economic downturn, local advertisers' budgets have been greatly reduced, and brand advertising has been transferred to strong TV stations (central and provincial TV stations) and new media, so the advertising revenue space for TV stations has become smaller.

The program’s influence has weakened and its monetization ability has declined.

Due to insufficient funds, talent and resources, most TV stations have been at a disadvantage in the competition for programs. In recent years, with the intensification of competition and the rise in program costs, the influence of local stations has gradually been marginalized, except for local news and offline activities, and the "traffic value" of programs has gradually decreased. Under the media operation model of "content is king", the ability of programs to realize profits has declined, and the advertising carrying capacity of the once "three major kings" such as news, variety shows and film and television programs has also dropped significantly.

Media convergence is slow, and young audiences are lost

Due to the limitation of funds, talents and technology, the construction of new media of most TV stations is progressing slowly. In the context of the accelerated integration of traditional media and new media, TV stations are seriously lagging behind in the technical platform, business process, user database and service platform of media integration. With the rapid transfer of young audiences from traditional media to new media, except for the middle-aged and elderly audience groups, TV stations are drifting away from the mainstream audience and are in danger of gradually "losing contact".

The system and mechanism are rigid, and the loss of talent is intensifying

Constrained by the institutional system and traditional concepts, TV stations lag far behind the market environment in the institutional and mechanism reforms such as corporate management, group operation and industrial development. With the vigorous development of new media and the entry of Internet giants, TV stations have greatly reduced their attractiveness to outstanding talents, and the rigid mechanism of "cadres can be promoted but not demoted, personnel can enter but not leave, and treatment can be high but not low" has aggravated the loss of talent, and the "hollowing out" of talent is the biggest crisis facing TV stations.

Single revenue channel, increased operating risks

Under the backward business model of "making programs and selling advertisements", TV stations mainly rely on advertising for revenue generation, and special medical advertisements account for the majority of advertising. With the introduction and implementation of the most stringent new "Advertising Law" in history in 2015, most TV stations' advertising has experienced a cliff-like decline, seriously threatening the survival of TV stations, and the operating risks of special advertisements are increasing.

2. As the "home entrance" in the intelligent era, The value of television is far from being tapped

With the advent of the smart era, the competition for the entrance to various scenarios has become fierce. In the past two years, smart speakers have emerged as a new force under the banner of "home entrance". However, in the smart home scenario, smart speakers are just a small role.

  In the era of intelligence, TV is still the core "home entrance"

Since 1999, Microsoft has spent billions of dollars to promote the "Venus Project" worldwide to advance into the field of information appliances. Although it ultimately failed, it exposed Microsoft's ambition to seize the "entrance" to the home. In 2007, when Apple officially released Apple TV, it began to compete for the "entrance" to the home. Subsequently, domestic Internet giants joined the "entrance" battle with hardware and applications such as smart TVs and boxes. In the era of intelligence, TV is the undisputed core "entrance to the home".

As the "home entrance" in the era of intelligence, although IPTV and OTT have gradually made TVs intelligent, the value of TV entrances has not yet been fully tapped. In the living rooms of thousands of households, TVs can not only serve as entertainment centers and cultural centers, but also as control centers and interactive centers for smart homes. This is the future of smart TVs.

However, as the "home portal" in the smart era, television is no longer exclusive to TV stations. If TV stations are only satisfied with being content providers, the value of "home portal" will have little to do with TV stations. In the Internet era, for most TV stations, "content is king" is a kind of self-hypnosis and a misjudgment of the development trend of the media. This outdated concept will encourage TV stations to "neglect" the crisis and even delay the opportunity for development and transformation.

In the era of integrated media, television communication still has unique advantages

At the 9th China Television Southern Forum, Mr. Leng Suo of the Chinese Academy of Social Sciences proposed: Don’t blindly criticize television, because without television there would be no screen-sweeping dissemination in the circle of friends.

In terms of communication characteristics, the linear communication of television is a disadvantage, lacking interaction, not being timely and costly, but television has the great advantage of focusing attention on a hot spot. In terms of consumption scenarios, television, as the "spokesperson" of family fun, has been fully integrated into family life and is irreplaceable in family social interaction.

At present, mobile phones have become the most important media terminals, but in the context of the integration of large and small screens, TVs as large screens are indispensable in the media communication chain. For example, last year's phenomenal TV series "In the Name of the People" would not have caused such a sensation if it had not been broadcast on TV, no matter which video website it was on.

Although young TV viewers are losing, it does not mean that the value of TV communication has disappeared. Instead, it is a protest and rebellion against the existing one-way communication model, outdated program content and old-fashioned operation methods of TV. As intelligence solves the interactivity of TV and improves the usefulness of TV, the value of TV communication will gradually recover.

In the era of consumption upgrading, there is huge room for TV stations to develop service industries

With the upgrading of social consumption, China has entered the "fast lane" of service industry development. For example, the market size of entertainment, health, education, tourism, sports and leisure services is at the trillion level, which is an order of magnitude larger than the TV advertising market size (the highest is less than 150 billion yuan). At present, the service industry has become the most important "outlet" for entrepreneurship. For TV stations, the main direction of development and transformation is to move from the media industry to the media service industry.

As a mainstream official media, TV stations play an important role in social life and have the core advantages of developing service industries:

The first is credibility. Compared with unofficial market-oriented media, TV stations have inherent credibility. In the era of pan-media, although "media is everywhere and everyone is a reporter", the lack of credibility is still the biggest obstacle to the development of new media. In the past few years, the credibility of TV stations has been severely impacted because the screens were filled with over-promotional or false propaganda special advertisements. With the implementation of the new "Advertising Law" and stricter supervision, the credibility of TV stations is gradually being rebuilt, and credibility is the "potential energy" for TV stations to develop service industries;

The second is integration. Compared with market-oriented enterprises, TV stations have strong resource integration capabilities. TV stations can integrate local government resources to provide public services (such as culture, performing arts, transportation, medical care, convenience, etc.) to local users; they can also integrate regional industrial resources to provide value-added services (such as marketing planning, brand agency, offline promotion, etc.) to related industries; they can also integrate local user resources to provide users with personal services (such as education, health, tourism, etc.). In the transformation and upgrading of traditional media, resource integration capabilities are the "driving force" for TV stations to develop service industries.

The third is proximity. From the audience's perspective, local TV programs are rooted in local culture and customs, and they have a sense of closeness and identity, allowing for more participation and interaction; from the business perspective, local TV stations are close to the local market and consumers, and can interact and communicate deeply with users, solving the promotion and service of the "last mile" of consumption; from the government's perspective, local TV stations are important channels for timely communication of public opinion, and can serve as a mainstream platform for solving people's livelihood issues and providing public services. Proximity is the "acceleration" of TV stations in developing the media service industry.

3. From the “highway” model to the “community” model, Television can be reborn

The crisis faced by TV stations is, on the surface, the decline in advertising caused by the implementation of the new "Advertising Law", economic downturn and the impact of new media; fundamentally, it is because the Internet has reconstructed a new media ecology, and the backward business model of TV "making programs and selling advertisements" is gradually declining.

In the era of mass media, the essence of the TV business model is the "highway" model

Before the Internet became popular, mass media represented by television monopolized communication channels, information and discourse power. In the era of mass media, the social division of labor was clear, and corporate brand communication and marketing promotion mainly relied on mass media (radio, television, newspapers, etc.). Therefore, as the most important mass media, television was in a "monopolistic" position in brand communication and marketing promotion, and it was easy to obtain the "attention" of a large number of users. The traditional television business model of "making programs and selling advertisements" converts "attention" into "advertising fees", which is essentially a "highway" model that collects tolls.

Figure 1: Traditional media business model: the “highway” model

In the era of “pan-media”, the TV business model is gradually moving towards a “community” model

With the popularization of the Internet, it has become the "infrastructure" of social development like water, electricity and gas. New media based on Internet technology have shown explosive growth, pushing human society into the "pan-media" era of "media everywhere and media on everyone".

With the advent of the "pan-media" era, the Internet has reconstructed a new media ecology: the boundaries of social division of labor are broken, and the boundaries between enterprises and media, users and media are becoming increasingly blurred; the media's "monopoly" position is broken, channels are diversified, and users are diversified; "attention" is broken, communication is fragmented, and media is segmented; users are reintegrated, users are stratified, and business is socialized.

Figure 2: Internet media in the “pan-media” era

In the era of "pan-media", the monopoly of mass media represented by television in terms of communication channels, information and discourse power has disappeared. The development and transformation of television is to adapt to the new media ecology, give full play to the core advantages of party media in terms of credibility, integration and closeness, build a media "community" composed of government, enterprises and users, and provide relevant services for government, enterprises and users.

Figure 3: New media business model: “community” model

Only by building a "community" model can television be "reborn from the ashes"

Based on our experience in serving radio and television media, the basic idea of ​​television media in building a "community" model is: based on its own resources and comparative advantages, build a new "2 circles + 1 chain" business model to achieve a transformation from a "highway" model (making programs and selling advertisements) to a "community" model (gathering users and providing services).

Figure 4: Schematic diagram of the new business model of “2 circles + 1 chain”

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.