LeTV's new cross-border logic

Spielberg, a famous Hollywood director , cried for nearly an hour while watching Coming Home, and praised: "This is another Zhang Yimou !"

In China, after four days of release, Coming Home has surpassed the 160 million yuan of Under the Hawthorn Tree, becoming the highest-grossing film of Zhang Yimou. This film is also Zhang Yimou's first film after joining LeTV Pictures. At the same time, the famous director Lu Chuan also signed a contract with LeTV.

In recent years, LeEco has been investing heavily in film and television content. From video websites to "super TVs" and then to film and television production, LeEco's cross-border steps have surprised many people.

Entering the film and television industry is the most critical step for LeTV in building its "platform + content + application + terminal" ecosystem.

A cross-border disruptor

Two years ago, LeEco announced that it would enter the TV market. As soon as the news came out, LeEco's stock price fell for three consecutive days.

Two years later, just one year after the Super TV was officially launched, its sales have reached 1 million units. While the sales of mainstream TV brands declined, LeTV Super TV experienced rapid growth. LeTV also ranked among the top in the video industry with its Super TV. In the list released by comScore in June 2014, LeTV.com ranked second in the industry in terms of total broadcast time, second only to Youku Tudou Group.

It is undeniable that this cross-border disruptor who suddenly broke into the home appliance market almost overnight made many traditional TV manufacturers suddenly wake up: if they don’t change, they will be changed by others. While scolding LeTV, the disruptor, they bought super TVs and put them in their offices to study them carefully.

The whole story of LeEco’s empire plan

On May 7, 2013, LeTV launched its first super TV, with the hardware price being half of the same model of smart TVs in the domestic market. In addition, it also charges users a certain content service fee. Super TV has established a new business rule: selling hardware at a low price and making profits from service fees.

This model is like a rock that has stirred up the home appliance market that has remained unchanged for decades. Many traditional manufacturers have cast strange eyes on it: You can’t play it this way!

However, this day will become the most memorable day in the life of Jia Yueting , the founder and CEO of LeEco Group , who is a believer of Jobs. On that day, he wore a black suit and stood on the huge conference booth like Jobs, walking back and forth to explain his dream to people - redefining television.

He has been waiting for this day for four years. As early as 2009, a plan called Prometheus had been circulated among a few core executives of LeTV. That year, LeTV started to make TV boxes, which was opposed by 95% of the company's employees. At that time, LeTV was still in a state of net loss.

From then on, the weekend meetings turned from discussion meetings into "quarrel meetings". In the first year, the sales of TV boxes were almost negligible. But Jia Yueting still firmly believed that hardware was a direction. No matter which meeting he attended, he repeatedly reiterated his ideas. Later, many employees simply stopped objecting because it was useless to object.

When the Super TV was finally made, it amazed many people. Peng Gang, senior vice president of LeTV TV, said that many people were gradually moved by the boss's dream. LeTV's current industry status and influence are also given by the Super TV to some extent. Without the Super TV, the website's business might not be possible.

Why is Jia Yueting so persistent in crossing borders?

The reason behind all his persistence is four words: user experience.

Jia Yueting believes that LeTV's choice to cross borders and conduct vertical integration of industries is to better meet user experience. Only by breaking down the barriers of professional division of labor can users experience better services.

Making hardware terminals is just to complete the closed loop of this value chain. With the launch of the Super TV, the LeEco ecosystem of "platform + content + application + terminal" has been formed. The source of this ecosystem can be traced back to the beginning of LeEco's birth. Since its establishment, LeEco has made the purchase of genuine film and television copyrights one of its major goals, and thus it has been called "the most complete genuine film and television platform" by the outside world. Subsequently, LeEco established LeEco Pictures, and successively introduced popular films such as "Tiny Times" and "The Expendables 2", and later acquired Huaer Films, the production company of "The Legend of Zhen Huan". "Coming Home" is the first blockbuster invited by Zhang Yimou to join, and it has achieved remarkable results.

Many people will be curious, why is it LeTV instead of Youku?

Because in the view of Youku CEO Gu Yongqiang , TV, like other terminals, is a new traffic entrance, and whether it is the web or mobile terminal, Youku's traffic is already large enough, so there is obviously no need to make hardware.

"LeTV aims to be a content service company, and its cross-border operations always revolve around this core to maximize user value. Cross-border operations can open up the entire value chain, thereby 'opening up' user experience. Let users experience LeTV's services on different terminals." said Peng Gang, senior vice president of LeTV TV.

He was still excited when he mentioned a report about Amazon that he had read in The Economist in June. He was deeply impressed by the picture accompanying the article. An astronaut stood on the moon, holding a box with the "Amazon" logo. Amazon's tentacles have extended to the moon!

Amazon has launched tablet devices, e-book readers, TV set-top boxes, mobile phones and other products in direct competition with Google and Apple. It has subverted the traditional publishing industry and launched a $9.9 e-book, which allows writers to bypass publishers and publish e-books directly.

It is difficult to define what kind of company Amazon is. But it is undeniable that if Amazon takes "serving users" as its purpose, Amazon's empire will extend to the whole world. Thinking of this, Peng Gang asked excitedly: "Since I am serving the whole world, what industry can't be changed?"

"The logic of cross-border is to grasp core capabilities, provide better services and experiences, and then continuously replicate them in different fields." Peng Gang is full of confidence.

Generating new value is true integration

If you look closely at LeEco Group, you will find that its non-listed companies also include online wine, ecological agriculture, Internet finance, real estate and other industries. Just like many large companies, after becoming bigger and stronger, they embarked on the road of diversified development.

What is the difference between corporate diversification and cross-border operations?

There are many diversified companies, but only a few have succeeded in cross-border operations. In Peng Gang's view, cross-border operations are not a simple superposition, but starting from "my logic" and fully combining the user habits of the cross-fields to create new things.

According to common understanding, Internet TV is to put online videos on TV and watch them on demand. Because everyone is used to doing this on PC, Pad and mobile phone, some enterprises take it for granted that users can also accept this form on TV, but ignore the user habits accumulated by the traditional TV industry for decades.

After a tiring day, people return home and hope to turn on the TV to relax. However, when simplicity is most needed, they still have to face countless complicated steps to select and order. The so-called smart TV has become unintelligent.

Compared with other smart TVs, LeTV pioneered the "carousel channel" format, which presents LeTV's massive amount of high-quality content to users in the form of channels after being recommended by backend editors.

It seems like a small cross-border innovation, but no one thought of it before LeTV.

Jia Yueting, the founder of LeEco, played a major role in the final presentation of the carousel. Many people were puzzled, "We are a video website, and if we turn it into a channel, wouldn't that be like going back to the days before liberation?" In the end, it was Jia Yueting, who always regarded himself as a "novice" user, who convinced them with his ultimate pursuit of user experience.

Why hasn’t any company done this before?

In Peng Gang's opinion, the most fundamental reason lies in the way of thinking. Cross-border is to provide users with a new value that the original industry does not have. The carousel not only respects the habits of traditional users, but also presents the Internet's massive content and the characteristics of not being restricted by time to users. And Super TV has perfectly presented the logic of video services on TV.

After LeTV pioneered this format, its peers followed suit. However, LeTV has already started the next step - cultivating users' usage habits on super TVs. That is, through data accumulation and analysis, it provides users with more and more personalized program content. Peng Gang believes that the final competition in smart TVs will come down to which product users are more accustomed to using.

At a seminar held within LeTV, some experts believed that compared with mobile phones, TV will not become the mainstream ecosystem in the future. If it targets niche groups, in addition to the entertainment and social functions that mobile terminals already have, LeTV Super TV should also focus on the family interaction function according to its characteristics, and provide users with new value that is difficult to achieve with traditional TV.

Internal collaboration is a matter of life and death for cross-border businesses

In early 2014, Jia Yueting sent an open letter to all employees, in which he mentioned that the success of ecological synergy is related to the survival of LeEco. If the internal organization does not undergo changes, it will not be able to support external order subversion and innovation.

He designated 2014 as the "Year of Ecological Organizational Collaboration". Jia Yueting's concerns are not without reason. Zhang Li, deputy dean of the National School of Development at Peking University, believes that vertical integration of a long value chain is more difficult than horizontal integration. This requires companies to not only achieve excellence in their own profession, but also to understand more. The coordination between various links is crucial.

For Liang Jun, who is in charge of products at LeTV, the biggest problem he faces is how to lead the hardware team and integrate the design of content services.

The mindset of hardware is quality first, that is, when a product is launched, it must be a perfect product. Hardware development takes a long time, and the months before launch are very tense. We always test it continuously to ensure that it is a perfect product at the moment of launch. Software is just the opposite. It is launched first, and then we collect feedback, make continuous trials and errors, and then continuously improve and revise it.

The problem with this difference in working methods is that the hardware and software teams are never on the same beat. Such differences forced the two teams to make compromises and changes. Later, a quality supervision team was set up to control the quality of hardware and software, and to coordinate the matching of software and hardware. At the same time, certain control nodes were set for the progress of the two. For example, the TV version of the factory was controlled to be combined with the software. Only in this way can the fast-iteration service be better matched with the hardware. What is finally delivered to the user is a high-quality service.

In the past, LeTV only made content, but now all content must be combined with the new presentation form of TV. If users complain that the video is not smooth, it may not only involve the hardware department. At this time, all departments must work together to find the root cause of the problem. In Peng Gang's view, compared with the time before the hardware business, the integration of various departments has been strengthened a lot. Because users participate in the whole process of the product, the entire business is activated.

Cross-border cooperation cannot avoid the cultivation of "ecological organization"

Based on the pursuit of the ultimate user experience, Jia Yueting proposed to establish an "ecological organization."

That is, the management-based organization and the project-based organization are parallel. The main features of the former are flattening, gridding, and cross-management, with the purpose of improving decision-making efficiency. The main feature of the latter is gridding, breaking down the hierarchy, and only setting up project leaders. Jia Yueting believes that only through these two organizations can a chemical reaction occur between different fields and truly create products with the ultimate experience.

However, this parallel organization was not as ideal as expected. Especially for middle-level managers, they had to report to many people and listen to reports from many people. At the beginning of its implementation, this organizational structure was in chaos.

According to Peng Gang, LeTV's latest attempt is to downplay KPI and try Google's OKR assessment method, which is to determine a big goal and several core points under the goal, and assess employees based on these core points.

While making organizational changes, LeEco also paid more attention to listening to the voices of users. In the weekly management meeting, the first part of the meeting is for the forum and community departments to report on the community situation, including the problems reported by users, common problems and the progress of solving the problems.

On the one hand, LeEco uses a user-driven mechanism to blur organizational boundaries and strengthen communication between organizations. On the other hand, through the establishment of an organizational structure and changes in the assessment method, the connection between various links becomes fluid.

On August 18, LeTV's fresh food app "Le Life" was launched. Is this a step towards LeTV's diversification, or another cross-border subversive work? Opening the homepage of Le Life, it is quite unique, just like its super TV, it has a strong "LeTV" flavor.

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.