IPTV, which is already saturated with users, can no longer withstand the surge of OTT.

The Ministry of Industry and Information Technology recently announced that the number of IPTV users has reached 112 million, with a total of 25.41 million new IPTV users from January to September this year. These 112 million users are all IPTV users of China Telecom and China Unicom, and China Mobile has accumulated 46 million OTT users.

In the past two years, the video business of China's three major telecom operators has been in full swing and has developed rapidly. First, as traditional telecom business is declining, telecom operators have regarded video business as a key strategic direction for the future and started to promote IPTV nationwide on a large scale; second, IPTV policies are clear, China Telecom and China Unicom have obtained IPTV transmission licenses, and have straightened out the broadcast control rights and transmission rights, and straightened out the interest relationship between the IPTV broadcast control platform (CCTV) and the secondary broadcast control platform (local TV stations).

As the number of IPTV users of China Telecom and China Unicom rapidly exceeded 100 million, local TV stations (IPTV secondary broadcast control platform) also made a lot of money. IPTV suddenly became a popular cash cow business for local TV stations. The telecommunications industry and the radio and television industry have never been so harmonious and win-win.

What is incredible is that China's IPTV business has emerged so rapidly, while IPTV business in Europe and the United States is declining. The latest example is that in the third quarter of 2017, AT&T's traditional TV business IPTV business and satellite TV lost 390,000 users, while OTT users increased by 300,000. Not only AT&T, all traditional TV businesses in Europe and the United States - cable TV, satellite TV, IPTV are showing a trend of accelerating user loss. Major TV stations and operators in Europe and the United States are shifting the center of their video business to OTT.

Why is China's IPTV business developing rapidly? This does not conform to the logic of the industry. As we all know, there are two kinds of logic in the world, one is called logic, and the other is called Chinese logic. The rapid development of IPTV in China at this stage only conforms to Chinese logic, not industrial logic.

As we all know, China's telecom operators have strong marketing capabilities. The KPI is directly linked to personal income. Under the business model of IPTV bundled with broadband, IPTV users' KPI is quickly completed. The telecom operators' business model of bundling IPTV with broadband does not harm their own interests, but the pricing of broadband and IPTV as a package is, to some extent, a detriment to the interests of users. With the addition of IPTV services, each household is charged 30 yuan more per month. The market size of 112 million users is 40 billion yuan per year, and one-sixth of it is more than 6 billion yuan for radio and television. China's IPTV market is a monopoly of telecom operators relying on their own broadband services. It is a monopoly benefit, not a benefit brought by market demand. China Radio and Television relies on the IPTV policy of the State Administration of Radio, Film and Television to get a share of the monopoly benefits of telecom operators, so everyone is happy.

Obviously, the rapid development of China's IPTV users cannot last long in this way of monopolizing and harming users. The Ministry of Industry and Information Technology's data in October announced various economic indicators of telecommunications services, but IPTV only had user numbers, no economic indicators. Among the 112 million users bundled together, what is the actual power-on rate? How long is the viewing time? How many paying users are there and how much income is there? How big is the scale of value-added services? These unpublished data are obviously too small to be shown to the public, and are almost insignificant compared to the main business of telecom operators. There are only tens of billions of revenue from bundling, which cannot be made public because of suspected bundling sales that harm the interests of users.

According to data released by the Ministry of Industry and Information Technology, the three major telecom operators have a total of 337 million fixed-line broadband users and 112 million IPTV users. Together with China Mobile's 4,600 users, the penetration rate of telecom operators' video services has reached 47%. At the current rate of development, the IPTV user penetration rate will reach saturation in the next two years, and the monopoly benefits brought by the growth in the total number of users will disappear. At the same time, it will inevitably usher in a large number of user cancellations, and it will become a tasteless business like cable TV services.

According to the logic of the industry, OTT is undoubtedly the direction of the video business. The OTT business in Europe and the United States is maintaining rapid growth, and traditional TV stations have begun to fully focus on OTT. The share of OTT large-screen viewing (new media) in the United States has increased from 21% in 2016 to 32%, which has exceeded the 22% share of PC. Under the condition of the continuous maturity of OTT, the share of mobile video has begun to decline, from 53% in 2016 to 46% in 2017. There is no doubt that OTT is the future viewing king. The Chinese OTT market has also entered a mature stage, and OTT users, advertising revenue, user payment revenue and application business revenue are developing in a blowout manner.

However, the poor China Telecom and China Unicom have to rely on monopoly and bundling to develop IPTV, which is already yesterday's news. China Mobile dares to think and act, and has directly developed 46 million OTT users. However, under the pressure of radio and television, China Mobile has also begun to bow to radio and television, and has migrated OTT business to IPTV business in some provinces. The latest news is that Anhui Mobile and Anhui Radio and Television have just signed a cooperation agreement to migrate OTT to IPTV.

Lao You has pointed out four options for China Mobile's video business, but China Mobile chose the worst option.

IPTV is to upgrade to OTT, not OTT to IPTV. This is the direction that the three major telecom operators should be very clear about. Radio and television policies need to be negotiated. Radio and television will not give in to telecom, but policies will give in to the market.

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.