Internet TV licensees must either actively evolve or be forgotten by the market

In the Internet TV industry, terminal manufacturers hold large and small meetings throughout the year, but it is rare to hear about license holders holding meetings, because they are low-key and because there is really nothing to say.

But China International Radio and Television (CIBN) held a conference called "Being Tolerant Is Greatness" to talk about their content strategy for 2017.

In the Internet TV industry, some people have described the role of licensees as "robbers" in the eyes of provincial TV stations, "gangsters" in the eyes of terminal manufacturers such as TV set-top boxes, and "fig leaves" in the eyes of video websites.

In the past two years, amid fierce market competition, some licensees have discovered that having the status of a national team alone is not enough. If they do nothing, they will still be eliminated. No one is willing to pay tribute to a Bodhisattva who does not provide any rain or dew every year.

If the license holders collectively start to focus on content, it means a change in the new media market landscape. However, the slogan "content is king" is not just talk, it requires real investment.

The road to self-evolution of license holders

The State Administration of Radio, Film and Television has issued two batches of Internet TV licenses and has said it will no longer issue them in the future. The seven licensees are CCTV International, BesTV, Hangzhou Wasu, Southern Media, Hunan Television, China Radio International and China National Radio.

The reason why the license holders support the right to speak is that terminal manufacturers must cooperate with any of the seven companies holding Internet TV licenses before they can launch Internet TV and network set-top boxes and other products. Of course, there have been some that did not follow the regulations before, such as LeTV, whose Internet TV terminals were once "naked" for two years, bearing great risks. Also because of the license issue, LeTV's stock price fell to the limit for two consecutive days, with a cumulative decline of more than 20%.

Under the influence of the Internet TV wave, the seven major licensees have gradually changed their roles in recent years and started the road of self-evolution. A long time ago, the licensees simply cooperated with terminal manufacturers and collected licensing fees and service fees; in the past two years, it has become a trend for investors to invest in licensees, and BAT has invested in this; since last year, the licensees have become more aggressive in their approach, and they can no longer just watch their "little brothers" thrive in the terminal market. Some licensees who have received money have also started to make their own TVs and have made efforts in copyright, content, and operations.

The seven major licensees have different content according to their investment directions. For example, Future TV has the content resources of CCTV, which is basically a monopoly resource. Its advantages are fully demonstrated when there are big sports events such as the Olympics, the World Cup, and the European Cup.

BesTV focuses on movies and events. It has not only cooperated with Hollywood companies such as Warner, Universal, Disney, Pixar, Paramount, Sony, and Huayi, but also with TV stations such as South Korea's KBS, South Korea's CJ Films, and Hong Kong's TVB. At the same time, BesTV also owns the copyrights of events such as NBA, Premier League, Bundesliga, Australian Open, and has an IPTV foundation.

Wasu takes into account the general public as well as children, the elderly, etc., and has its own characteristics in carousel channels and TV games.

China Radio and Television Oriental has a lot of video content in life, education, and international news, and is also making efforts in TV games, concerts, and original programs.

Due to its close relationship with iQiyi, Galaxy TV's content resources are mostly entertainment content, which is more in line with the viewing habits of young groups.

Southern Media is a joint venture between NMG and UBO. Its content suppliers include Sony, Warner Bros., Paramount, South Korea's MBC, Hong Kong's Media Asia and other well-known domestic and foreign film companies. It tends to build large-screen digital distribution theaters for families .

Mango TV's content is more oriented towards young users. In addition to Hunan Satellite TV's variety shows and TV dramas, it is also good at producing its own content and insists on the "exclusive broadcast" route to ensure the diversity of its content.

From the initial chaos to the licensees' efforts in capital, copyright, and content operations, it is expected that the seven major licensees will gradually widen the gap in the future.

Is the spring coming for license dealers?

"Even if some licenses are not cancelled in the future, they will have no value."

Some people in the industry have already made the above prediction. A new round of reshuffle is underway, and the warm spring may only come to one or two license holders.

Some licensees began to look for outlets for their content, and terminal hardware became the best choice. As a result, there were CAN TV under China Media Group and Fengxing TV under BesTV on the market. Mango TV chairman Nie Mei also recently revealed that Mango TV would definitely make an Internet TV, at least an operating system.

For traditional TV manufacturers and early-stage Internet TV manufacturers such as LeTV and Xiaomi, this also means a new group of competitors from the national team. In the Internet TV industry chain, every manufacturer and enterprise involved has the vision of controlling the overall situation by developing terminal products.

But no matter what, actively participating in market competition has become an inevitable choice for licensees. The old way of "selling licenses" will definitely not last long. The ability to enhance content aggregation and operate users needs to be further improved.

According to forecast data from AVC, the retail volume of smart TVs will reach 41.87 million units in 2016. By the end of 2015, the number of Internet TV terminals in my country had reached 165 million units, and this number will further increase to 213 million units in 2016, providing a foundation for Internet TV operations.

However, compared with the content of major video websites, the content of licensees is indeed not so popular with consumers. Fu Qiang, the person in charge of Kanshang TV, once said frankly that although he holds only a few licenses in the industry, he still feels a lack of resources. "Making videos requires huge investments, but state-owned enterprises are not allowed to lose money." And content is the basis for operating users.

In response to past pressure from licensees, netizens were more forthright: "Do you really think we have entered the 21st century? Do you really think we can enjoy the same freedom as Americans? Come back! Go back to 1984!"

It is indeed not easy for licensees who wield the double-edged sword of regulation to be likable, but at the very least they should be the guardians of the rules, creators of value, and caregivers of users.

In a fully competitive market, even if you are unwilling to move, someone will push you forward. Who is the leader of the Internet TV industry chain? Everyone wants to know the answer, and all participants are actively answering it.

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.