The Hunger Games of Internet TV: LeTV’s Suspension

Once any business model touches upon policy restrictions, all outcomes become unpredictable.

Just two days ago (August 21), LeTV, which has been making a lot of noise recently , temporarily suspended trading. Although LeTV tried hard to say that the reason for the suspension was the deliberate smear campaign by its competitors, according to some information currently disclosed, the suspension of LeTV is inextricably linked to the State Administration of Radio, Film and Television's adjustment of the TV content license policy.

The situation LeTV encountered is actually just a microcosm of the situation faced by domestic Internet TV - the secret struggle between domestic Internet video companies and the State Administration of Radio, Film and Television has gradually become public. In other words, the patience of video companies is constantly decreasing (or the users of Internet video companies are "fighting for justice") for the practice of the State Administration of Radio, Film and Television to continuously shrink its authority (banning boxes, forcing UI changes, and restricting the issuance of licenses). Therefore, it is not difficult for us to see that an article titled "LeTV's Ten Questions to the State Administration of Radio, Film and Television: Do you understand the law? Do you understand politics? Do you love your country?" was forwarded crazily in the circle of friends.

PingWest founder Luo Yihang described the current situation of LeTV and traditional TV stations under the supervision of the State Administration of Radio, Film and Television as an "interesting" contrast in his book "Saved the Box, But Lost the People":

On the one hand, the State Administration of Radio, Film and Television is highly vigilant and severely cracking down on LeTV's entry into the television content broadcasting and control from the Internet field. On the other hand, once-well-known hosts of ace TV programs have jumped to LeTV, iQiyi and Sohu Video to engage in the self-production and broadcasting of Internet video content.

If we consider it from a purely competitive perspective, Internet video has incomparable advantages over traditional TV:

1) Content-related restrictions are reduced (compared to traditional TV content, Internet videos are relatively more open), making it easier to attract user attention; 2) People are also relatively free (compared to the past when CCTV restricted hosts from accepting commercials, etc.), making it possible to reserve high-quality talent; 3) Profits can also be maximized (compared to traditional TV's single advertising revenue, Internet video companies have more diversified charging models), thereby achieving sustainable development.

However, if we consider all factors, it is impossible not to consider policy restrictions at the commercial level. For Internet video companies, this means:

1) The policy of SARFT is likely to cause Internet video companies to slow down or even temporarily stop their layout in the Internet TV industry in a short period of time; 2) Internet video companies will become "martyrs" in entering the TV industry - judging from the development history of blogs and microblogs in the past, first entrants may not be able to taste the fruits of victory; 3) Existing businesses will be affected, especially when domestic video websites are in a state of "warring states", and the pressure from competitors cannot be ignored.

Under such circumstances, Internet video companies entering the television industry have also fallen into a situation of extremes, which is even like the scene in the movie "The Hunger Games": if they decide to move forward, due to the conflict between their own business model and policies, they will make it easy for competitors to take advantage of them in the game with policies; if they maintain the current status, all companies that aspire to enter the Internet TV industry will be in a situation of mutual consumption and stagnation until one or several of them can no longer hold on.

From the two statements released consecutively by LeTV yesterday, we can vaguely guess its mentality in this "Hunger Games": regarding the suspension of trading, the statement directly pointed out the smear campaign against competitors, which shows that it attaches great importance to its competitors; regarding the statement "LeTV's Ten Questions to the State Administration of Radio, Film and Television", it was not from the official side but was written by a user on Snowball, which shows that LeTV has not made up its mind to stand up and point the finger at the State Administration of Radio, Film and Television.

In fact, although we cannot conclude that if there is no pressure from policy adjustments, Internet video companies will enter the TV industry faster and better, but we can predict that if there is no policy pressure, the competition around the "emerging market" of Internet TV will become more and more fierce. It is common sense that when the confrontation between two parties turns into a three-party game, the complexity of the situation will increase three times.

How Internet video companies will break through in the TV industry is probably unpredictable. But we do know that in the Three Kingdoms period, even Zhuge Liang’s extraordinary talent only delayed the unification of the country by Cao Wei, and ultimately failed to change the course of history.

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.