Three reasons led to a collective change of management at PPTV

Yesterday afternoon, the industry reported that PPTV CEO Lu Yan and several senior executives would resign, and Suning would send senior executives to take charge of the company's daily operations. PPTV's public relations department said they were not aware of the rumor, but after we learned from various sources, we found that the rumor was true. At the same time, this is the third time that PPTV's management, including the CEO, has been replaced within one year after the acquisition.

In October 2013, Suning announced that it would jointly invest US$420 million with Lenovo Holdings to acquire a stake in PPTV. Suning became the largest shareholder of PPTV with a 44% stake, while Hony Capital, a subsidiary of Lenovo Holdings, became the second largest shareholder with a 29.9% stake.

After Suning and Lenovo invested in PPTV, several former PPTV executives, including PPTV founder and CEO Tao Chuang, resigned in March this year. Subsequently, Lenovo executive Lu Yan became PPTV CEO. Along with this personnel adjustment, several Lenovo executives were parachuted into PPTV. We understand that Suning executives will take over the former Lenovo executives in the near future and be responsible for the daily operations of PPTV.

What problems occurred within the company that led to the three changes in management in the one year after PPTV was acquired? After communicating with many insiders, we found the following three important reasons for the collective change of management in PPTV:

1. SoftBank is eager to exit PPTV and its prospects are deliberately exaggerated

The reason why PPTV was acquired by Suning was mainly because the investor at that time, SoftBank, was eager to cash out and exit, so Suning painted too high a rosy picture on many data indicators and market prospects. This led to Suning, which was eager to make a big splash in the e-commerce field, being overly optimistic about the development of PPTV and even China's online video field. With the completion of the transaction at that time, SoftBank completed its cash-out task.

A former PPTV executive told us that PPTV's cash flow had been tight for a long time before Suning acquired a stake in it. Before the acquisition, both SoftBank and PPTV had deliberately described the competitive prospects and data in the online video field. As for Suning, due to its insufficient understanding of the Internet and video fields, the KPIs it set after acquiring PPTV were too aggressive.

2. The integration process with Suning did not meet expectations

In addition to the overly radical KPI, Suning's over-emphasis on PPTV is another major reason for the two major management changes within a year. According to insiders, Suning attaches great importance to the development of the Internet, especially e-commerce, and has made e-commerce business one of the core strategies to be cultivated in the next ten years. When Suning acquired PPTV, Sun Weimin, vice chairman of Suning, also proposed to the company internally that PPTV's content should be implanted into the terminal and that the integration of e-commerce and video should be used to accelerate Suning's progress in becoming China's Amazon.

Although Suning attaches great importance to PPTV, due to the accelerated competition in the video industry and the weak foundation of PPTV as an independent video website, since its acquisition, its integration with Suning and the development speed of the built-in terminal field have not only failed to meet Suning's requirements, but are also getting further and further away from Suning's vision. In addition, for PPTV, Suning's resource advantages accumulated in traditional fields cannot help PPTV grow in the increasingly competitive video industry.

3. New radio and television policies have led to setbacks in terminal strategies

Suning originally planned to acquire Redbaby and PPTV to connect the two key links of the Internet, e-commerce and content. In the original plan, video terminal equipment was a very critical product. As early as the end of 2013, PPTV had launched a number of OTT products. However, with the tightening of supervision on video terminals by the new radio and television policy in the middle of this year, PPTV's original strategy of focusing on the development of OOT failed.

"For video websites like Youku and iQiyi, you can see that although the regulation of video terminal devices such as set-top boxes has brought them adverse effects, they have adjusted quickly. It can be said that OTT may be the key business that these companies want to focus on, but it is definitely not the only core business to focus on. However, this is not the case for PPTV." According to people familiar with the matter, PPTV's slow response to the regulation of radio and television has put it at a disadvantage in the competition in the video industry. These reasons have led to two changes in PPTV's management.

in conclusion

According to insiders, PPTV's OTT department had previously laid off employees, and with the arrival of Suning executives, news of large-scale layoffs has spread internally. In today's online video field, PPTV has become a supporting role. For Suning, which is eager to become China's Amazon, how much value does PPTV still have?

In the future, can PPTV help Suning achieve its strategic goal of e-commerce + video? This will determine the future survival of PPTV. At present, it seems unlikely that Suning will use its video and e-commerce businesses to build China's Amazon or that PPTV will carve out an independent space in China's online video field.

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.