Internet TV seeks self-help after being stopped

The Internet TV industry suddenly entered a winter. Since June, the State Administration of Press, Publication, Radio, Film and Television (SARFT) has issued a ban on TV video apps that have not cooperated with the license holders.

This policy, to a certain extent, has caused Internet TV to lose its "Internet content". The "Shanda Box", which was the first to enter the Internet TV market ten years ago, was once stopped, and now the future of Xiaomi Box and LeTV TV is uncertain. However, even so, the huge living room market will still attract a large number of Internet TV manufacturers to follow suit, and more special terminals will shoulder the task of "saving the country in a roundabout way". Some manufacturers have already planned to launch a 55-inch tablet to achieve large-screen playback of mobile phone videos. There are also manufacturers planning to bypass the box route and provide Internet video landing through routers or from the cloud.

The State Administration of Radio, Film and Television is "really serious" about banning

The State Administration of Radio, Film and Television has taken real action to rectify Internet TV boxes. Industry insiders said that within three months, the State Administration of Radio, Film and Television has "taken heavy measures" to remove TV apps developed by major video websites. One netizen said that he finally returned to the living room from the computer, where the family sat together happily watching TV, but was pushed back to the computer.

On June 23, the State Administration of Radio, Film and Television sent letters to local radio, film and television bureaus, specifically requiring Internet TV license holders Wasu Media and BesTV to make rectifications and close the download channels of various video apps, video aggregation software, and Internet browser software in all their Internet TV terminal products.

After that, the State Administration of Radio, Film and Television took action against the biggest technical selling point of Internet TV: it ordered all Internet TV set-top boxes to stop providing time-shifting and playback functions for TV programs.

Soon after, the SARFT met with the seven licensees again, saying that each of them had violated the regulations to varying degrees, and that if any of them did not comply with the SARFT's requirements, their licenses would be revoked. If all seven violated the regulations, their Internet TV business would be suspended. At the same time, the SARFT also issued the most stringent rectification order for the box: TV dramas and micro-films imported from abroad must be taken offline within a week, and unapproved terminal products are not allowed to be put on the market.

Even those who are considered to be the “direct descendants” of radio and television cannot escape rectification. On August 20, the State Administration of Radio, Film and Television criticized CNTV’s Future TV for its poor rectification and pointed out that the set-top box UIs of Xiaomi and LeTV, which cooperated with it, violated the regulations.

September 18 was the most recent "talk". The State Administration of Radio, Film and Television asked all Internet video companies to remove all TV apps developed by video websites within that week. If they have not made rectifications by the next week, their Internet audio-visual licenses will be revoked and their servers will be shut down. "The atmosphere is quite severe and unprecedented," an insider told the Beijing News reporter that evening.

It is understood that as soon as the meeting was over at noon on September 18, TV video apps including Youku, LeTV, and iQiyi were urgently removed from the shelves, and such software could not be found in the app store at all. Even more radically, some video companies' newly launched new video apps that attempted to conquer the world under a different name were also killed. iQiyi's Galaxy version app, Youku Video XL version, Tudou Video XL version, Sohu Video MAX version, Baidu TV Cloud, etc. could no longer be downloaded.

“We have stopped all services on TV. Even if you download the client, you can’t use it,” a Youku Video insider told the Beijing News.

Industry insiders said that in the Internet TV industry, there are always three principles: catering to industry trends, meeting user needs, and negotiating with regulatory policies.

Ten Years of Competition in Internet TV

“Although it is not winter, Internet TV has reached another low point.” The Youku insider said with a smile that related work was stopped all of a sudden, and it was a rare opportunity to have some free time during the National Day holiday.

Internet TV literally means a TV connected to the Internet. In the eyes of Internet companies, once a TV screen is connected to the Internet, it is a gold mine worth developing, just like mobile phone screens, computer screens, and PAD screens.

About ten years ago, Chen Tianqiao, CEO of Shanda Network, was the first to see this market and proposed the concept of "Shanda Box", which was the first in the industry to call for "turning TV into computer". At that time, the media described the "Shanda Box" as being connected to a TV, accessing broadband and cable TV networks, and upgrading the TV to a network terminal or computer terminal, using a simple remote control operation method to achieve many functions and applications centered on "entertainment, life, and knowledge".

It sounds like the "Shanda Box" is like a twin brother of the Xiaomi Box and LeTV Box that are now popular among enthusiasts.

In 2005, Shanda launched the Shanda Box, which was stopped by the State Administration of Radio, Film and Television the following year. The SARFT said in a letter that any act of bringing Internet content to TV sets without a license would be stopped.

In the decade since then, China has grown into the world's largest producer, consumer and exporter of color TVs. According to CMM data, my country's color TV production has exceeded 100 million units, and the total domestic sales volume of color TVs in 2013 was 47.81 million units. At the same time, the number of Internet users in my country has reached 632 million. As of February 2014, the number of households covered by optical fiber nationwide has reached 172 million, and the number of fixed broadband access users nationwide has reached 192 million.

Market demand and technological trends have driven China's Internet TV to move forward. In the past decade, color TV manufacturers, LeTV and other Internet companies have successively entered the TV screen. However, during the past decade, there have been constant reports of the State Administration of Radio, Film and Television calling off the development of Internet TV.

In 2009, the SARFT issued a letter to halt the development of Internet TV, which was just beginning to emerge. It was also boycotted by the six major domestic color TV manufacturers, including TCL, Skyworth, and Konka. The China Electronic Video Industry Association also wrote a joint letter to the SARFT on behalf of the six major color TV manufacturers, strongly supporting Internet TV.

In 2011, the State Administration of Radio, Film and Television issued Document No. 181 ("Operation and Management Requirements for Institutions Holding Internet TV Licenses"), which stipulates that all video programs played on Internet set-top boxes must be delivered through a broadcast control platform approved by the State Administration of Radio, Film and Television. The State Administration of Radio, Film and Television issued two types of licenses: the content broadcast on the Internet box must be provided by the content service license holder, and must be reviewed and managed by the integrated business license holder before it can be broadcast.

In 2012, with the support of seven major licensees and the participation of both old and new forces, color TV companies and Internet companies, the Internet TV boom rose again. "If we continue with the development speed of last year, within a few years, the user scale will be built up and the business model will be implemented," an insider of a video company told the Beijing News reporter.

In the game between technology and policy, technology still loses.

Can hardware innovation save the situation?

An insider of a home appliance company told reporters that Internet TV may develop in two directions in the future. Either it will be a display terminal connected to the TV set-top box of a radio and television station, or it will become a simple screen, with all Internet content coming from mobile phones or other mobile devices, projecting the content onto the big screen.

Following the first path, the Beijing News reporter learned that all video companies are currently "clinging to the thighs" and hope to be closely integrated with the license holders to meet the requirements of the State Administration of Radio, Film and Television. To this end, Youku Tudou spent 50 million yuan on China Media Group's holding company, China Media Group Guangdong, in exchange for its 16.6667% equity and the guarantee for the two parties to jointly carry out Internet TV-related businesses in the future. LeTV also urgently joined hands with Chongqing Radio and Television to jointly apply for content licenses, hoping to expand its autonomy in content operations.

Following the second path, the Beijing News reporter learned that in the near future, more new hardware may be released. A domestic TV manufacturer revealed to the reporter that they are already preparing to launch a 55-inch tablet, and all video content that consumers can watch on their mobile phones and PAD terminals can be projected onto this large tablet for viewing. At present, the product has no official name.

Some industry insiders predict that smart routers may become home terminals in the future. The operating system and content will be in the router, and the TV will become a complete screen.

"Even routers are controlled. Now cloud disks are popular. Users can log in to cloud disk clients through TV to share videos. This is an area that the radio and television cannot control." The above-mentioned industry insider said that in short, the trend of Internet TV is irreversible, the market demand exists, and the technical means are also flexible. It is unlikely to control all channels in one way.

■ Analysis

Traditional business models are under attack

Commercial advertising has always been the mainstay of the radio and television system's revenue. Television stations purchase content from film and television production companies and earn revenue through copyright distribution and advertising. This model is being impacted by major video websites.

Industry insiders said that in terms of content, video websites have introduced copyrights of American and British dramas, cooperated with sports events such as the Chinese Super League and NBA, and even poached people from the television industry to produce their own film and television programs.

On the other hand, in terms of channels, the introduction of video website content to TV screens through the Internet has impacted the most important channel of radio and television, the radio and television network. Under the impact of both aspects, the radio and television system has found that the interests of traditional advertisers are shifting outside the system.

According to media reports, the State Administration of Radio, Film and Television has always wanted to control the entire Internet TV industry through the seven major licensees, but facts did not develop as expected.

Many licensees turned a blind eye to the practices of terminal manufacturers for the sake of profit, which put managers in a passive position. Therefore, the State Administration of Radio, Film and Television chose to start with the licensees.

Although the rectification of Internet TV apps has achieved immediate results, with the development of new technologies, the policy fences of radio and television may be increasingly impacted.

Major Events in Internet TV Rectification

June 23

The State Administration of Radio, Film and Television specifically requested that Internet TV licensees Wasu Media and BesTV make rectifications and shut down the download channels of various video apps and video aggregation software in all their Internet TV terminal products.

July 8

The State Administration of Radio, Film and Television requires cable TV network companies to conduct large-scale application trials of TVOS1.0. Smart TV set-top boxes and other terminals are not allowed to install any operating systems other than TVOS.

July 14

The State Administration of Radio, Film and Television has ordered all Internet TV set-top boxes to stop providing TV program time-shifting and playback functions.

July 15

The State Administration of Radio, Film and Television met with seven license holders and said that each of them had violated regulations to varying degrees. If any of them failed to comply with the administration's requirements, their licenses would be revoked. If all seven violated the regulations, their Internet TV services would be suspended.

August 20

When the State Administration of Radio, Film and Television criticized CNTV's Future TV for its poor rectification, it pointed out that the set-top box UIs of Xiaomi and LeTV, which it cooperated with, were in violation of regulations.

September 18

The State Administration of Radio, Film and Television has asked Internet video companies to remove all TV apps developed by all video websites within that week. If they have not rectified the problem by the next week, their Internet audio-visual licenses will be revoked and their servers will be shut down.

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.