Analysis of the Ultimate Pattern of Television Internetization

1. Industry trends of the Internet

The PC Internet era gave birth to the three Internet giants BAT, whose main business models are information search + advertising, e-commerce, and social network + digital entertainment. However, as an important business of the PC Internet, Internet video has not produced a company with a market value of hundreds of billions like Netflix. In the mobile Internet era, Tencent WeChat has occupied the entrance to the mobile Internet, and Xiaomi has gained a place in the mobile Internet with its unique business model and marketing methods, and its hardware product Xiaomi smartphone. In addition, the mobile Internet O2O industry combined with traditional industries is in the ascendant. Although mobile video has shown explosive growth, it is no longer the main hot mainstream business of the mobile Internet.

The PC Internet is already in a state of slow decline due to market saturation, while the mobile Internet is maturing. A new Internet era is coming, which is completely reshaping human production and life. This new Internet era may be called the "smart Internet" era, showing two major trends: one is intelligence, where all terminals are intelligent and connected through the Internet; the other is the combination of the Internet and traditional industries, which will improve human survival more profoundly than electricity.

2. Home Internet is coming

The TV screen will become the largest Internet screen after the PC screen and mobile screen. Obviously, the business ecosystems on the three screens are very different. What kind of business model will the TV screen, the entrance to the home Internet, achieve? How to combine with other smart home terminals to provide new services? This is the future pattern and contains huge new business value.

All this has just begun. Who will take the lead in the era of home Internetization needs to be prepared. BAT, Xiaomi, LeTV, TV media, TV network, TV terminal, game and other related service companies are all seeking to seize the new era of home Internet on large screen TV. Among the three BAT companies, Alibaba is vigorously promoting, Tencent continues to implement the follower strategy, Baidu does not have a company-level strategy, Xiaomi is already actively competing for the home Internet entrance, and LeTV's Internet TV strategy has turned to other fields such as mobile phones and automobiles after being blocked by policies.

Although Internet companies have begun to deploy home Internet, innovative business forms have not yet been formed, and new business models have not yet been established. With the process of intelligentization of TV terminals and other home terminals, the next 5-10 years will be a critical stage for the exploration and development of home Internet.

3. The overall situation of television internetization

As a person who has crossed the boundaries of the Internet and television, the Internetization of television is a major issue that I am concerned about. The combination of television and the Internet also presents two characteristics: one is the intelligence of the terminal, and the other is the Internetization of television, which is a combination of television and the Internet as a traditional industry. The traditional television industry is a vertical industry chain, including program production, broadcasting, transmission, and terminals. The business model is mainly advertising and user payment. The Internetization of television will completely change this business value chain. All market players in the traditional television industry chain face major challenges in transformation, and those who fail to successfully transform will be eliminated by history.

The intelligentization of TV terminals is becoming more and more popular. In 2015, the domestic TV shipments were about 45 million, and the penetration rate of smart TVs will reach 70-80%. The shipments of set-top boxes that make traditional TVs intelligent will exceed 20 million. At present, the domestic TV stock exceeds 100 million, and the set-top box stock exceeds 40 million. It can be predicted that the intelligentization of TV terminals will be basically completed within five years. Except for areas where the Internet has not reached, all TVs will be Internet-based, and the TV ecosystem will be reshaped.

The players in the home Internet are the market players that have successfully transformed the traditional TV industry chain and the newcomers such as Internet companies. Among these two types of market players, new home Internet giants will emerge in the era of "smart Internet".

4. Analysis of the TV Internetization Pattern

Traditional TV media were first impacted by Internet videos in the PC Internet era, and then mobile videos continued to attract attention. Due to various reasons, no domestic or foreign TV media has successfully transformed in the PC Internet era. The intelligence of TV terminals has brought new opportunities to TV media. Relying on the traditional content and brand advantages to quickly go online, traditional TV media has every chance to compete with Internet companies and regain the home Internet and become the protagonist of the living room.

In this process, traditional TV media and Internet companies all thought of the user-level device of TV terminals. It is a great shortcut to acquire and operate users through terminals. Xiaomi took the lead and successfully sold 8 million Xiaomi boxes by copying the model of Xiaomi mobile phones. Xiaomi's home Internet portal began to have imagination. However, contrary to the expectations of Xiaomi leaders, Xiaomi TV suffered a Waterloo and failed to successfully open up the market. The first to make efforts in the field of TV sets was LeTV, which copied Xiaomi's marketing pricing model and the telecom operator's contract machine business model. LeTV Super TV set off a sensation in the market. Alibaba promoted its smart TV operating system "YUN-OS" in various ways to acquire users. Subsequently, broadband operator Dr. Peng, OTT licensee China Guangdong Oriental, cable TV operators Gehua and Tianwei, etc. successively launched TV sets and set-top boxes in the "contract machine" model. For traditional TV manufacturers, these newcomers adopted a new business model of free hardware or "zero profit" and relying on content services to make money, which subverted their business model of making and selling hardware to make profits and forced them to transform into user services.

However, although the intelligence of TV terminals is an important part of TV Internetization, the root of TV Internetization is the Internetization of content and services, and there are also important market access policies for TV services in China. The first thing needed for China's TV Internetization is a legal market entity identity, which is basically limited to state-owned TV media, and commercial organizations can only participate. Second, it needs the ability to provide content, one is to create it yourself, and the other is to purchase and integrate it. Third, it needs platform service capabilities. Fourth, it needs business and commercial innovation capabilities in the "smart Internet" era. A few days ago, the two focuses of the war between Xiaomi and LeTV were content and policy. There was no major disparity in content integration and hardware products. In terms of market access for TV Internetization, neither company was qualified, and I don't know what they were arguing about.

5. The core role of TV internetization enters the market

In the process of China's TV Internetization, there is a major event that has not been fully recognized by the impetuous industry in recent days. The reorganized Shanghai Media Group BesTV invested 3.3 billion in the TV ODM listed company Shenzhen MTV. The cooperation between the two parties is aimed at smart TV terminals. The reason why the author believes that this is a major event in China's TV Internetization is that the smart TV strategies of Shenzhen MTV and BesTV will greatly affect the pattern of TV Internetization.

There are at least eight factors that will change the market landscape through the cooperation between BesTV and MTC: First, BesTV is a legitimate market player in the Internetization of Chinese TV, which excludes all Internet companies. Second, BesTV’s capital strength is no less than that of Internet companies, and its market value is second only to BAT and JD.com. Its market investment is fully guaranteed, and its copyright content purchase and integration is no less than that of Internet companies, which exceeds other legitimate Internet TV players. Third, BesTV and SMG’s content production capacity exceeds that of Internet companies. Fourth, MTC’s industrial manufacturing capacity combined with Fengxing.com’s platform product capacity will produce smart TV products that are no less than other smart TV products. Fifth, the business model of “contract phones”. Sixth, the advantage of Haier’s channel support. Seventh, BesTV’s channel advantage of more than 20 million IPTV, Oriental Cable, Gehua Cable, and DVB users of China Broadcasting Network. Eighth, BesTV’s support for innovation in the business model of Internetization of TV, the e-commerce support of Oriental Shopping, and the advertising support of Adsage.

Once the smart terminal jointly developed by BesTV and Zhaochi opens up the market, the impact it will bring will exceed that of Xiaomi, LeTV, TV manufacturers and other market players. The direct competitor will be Alibaba, and the entire market structure will change accordingly.

6. Conclusion

From a macro perspective, China's television internetization will form a situation of symbiosis and prosperity with state-owned core television media leading the way and Internet companies participating. Subversion by Internet companies is unrealistic, and television media will have no future if they do not make progress. The efforts of Alibaba and Xiaomi are worthy of respect, and BesTV and Mango TV should speed up their efforts. The protagonists of the future of home Internet will be born here.

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.