OFweek smart home network news: In recent days, the seemingly calm Chinese smart TV market has begun to waver again.
First of all, LeTV, the president of LeTV’s LeTV, issued an open letter to “On LeTV's Protracted Warfare†and attributed the high-priced new products just introduced to “the rising cost of raw materials for the entire TV industry†and bluntly stated that “Chinese users no longer need to "Low-priced products," but the remarks were immediately questioned in the industry. For example, Kao Xiongyong, vice president of TV marketing, pointed to Liang Jun's "On LeTV's Protracted Tactics." .
Then the question came, why did Liang Jun's speech get so questioned? What is the reason behind this?
Perhaps coincidentally, just when Liang Jun cast out "On LeTV's Protracted War", Levision Global Group Co., Ltd. and Vizio Corporation announced that due to the unfavorable regulatory constraints, the merger agreement to acquire Vizio will no longer continue to advance. In other words, starting in July last year, Levie’s acquisition of Vizio, the US’s smart TV giant, for the world’s $2 billion acquisition ended in abortion.
It should be noted that although both Levision and Vizio externally claim that the reason for M&A abortions is mainly regulatory factors, many foreign media analysis believes that apart from regulatory factors, Lehman's capital chain breaks that began in the second half of last year should be the main ones. One of the factors, coupled with rumours of Lexus’ layoffs in the North American market, can be seen as a major setback for LeTV’s strategy to use the acquisition of Vizio to expand into the North American market. LeTV or Letv Ecology has to return to the origin of the Chinese market, that can only hope that in the Chinese market and the suffocation of your friends.
Perhaps because of the above reasons, the new president of LeTV, which is LeTV's newest player, recently sent out a commentary on "the prolonged war on LeTV." There have been many reprints of this speech on the Internet. We will not repeat them here. After reading through them, the greatest feeling for us is to remember more than reality and the future, but as the saying goes, when one always misses the past, this People are certainly old, companies are.
Actually, we understand very well where LeTV is so reminiscent of the past. When “we changed the industry’s traditional profit model with a “twice-performance, half-price†strategy†and “adhere to high allocation and hardware cost pricing,†these are summarized in the form of paragraph headings. When appearing in Liang Jun's long speeches, I believe that the industry has already guessed that LeTV did not use it to enter the smart TV market. Although it has been losing money, its LeTV ecosystem has not yet been truly established and valued, but it has taken a good look. The so-called China Smart TV market ranks first in terms of annual shipments. In other words, this is the only visible core advantage of LeTV's entire ecological bottom line.
Unfortunately, entering this year, the only visible core advantages of LeTV's TV, whether it is the helpless adjustment from its own strategy or the increasing competitive pressure from the external market, have all been diluted intangibly. This also explains well that Liang Jun no longer mentions hardware cost pricing in the latter part of his speech, but instead uses so-called “high-configuration, high-performance†and “ecological open strategies, only for the continuous feedback of users. The summary screen headings such as the "big screen operation capability" have been replaced. The facts of the market have indeed confirmed this point.
At present, LeTV's main cost-effective Super TV X series, its price advantage has lagged behind the opponent, here is a comparison: music as the X series 43M/50M/55M's price is 2599 yuan / 3299 yuan / 4599 yuan, and millet configuration Quite the millet 4A series products 43/49/55, the price is 2199 yuan / 2699 yuan / 3399 yuan.
Liang Jun attributed this to the fact that the rise in raw materials was a susceptibility to light. Zhong Yikang's data shows that although TV panel prices increased last year, the panel's gains have converged since March this year, prices have stabilized, and there has been no so-called sustained rise. Perhaps the key lies not in the rise of TV raw materials. It is estimated that it is related to the breakdown of the capital chain last year and the pressure of introducing external capital to require its profitability. This seems to make LeTV no longer able to afford value. Losing the advantage of cost-effectiveness, LeTV's ecological model will be followed?
As regards the content of LeTV's television ecosystem as the most valuable part, it is even more worrying in the industry. Take the TV drama "People's Name" recently broadcast as an example. You can see it on almost all video sites such as Tencent Video, iQIYI, Youku Tudou, Sohu Video, PPTV, Mango TV, etc. It is unthinkable for LeTV to use the pattern of self-produced copyrights for copyright distribution. Perhaps when the funds are sufficient, this model is quite competitive, but once the funds are short, the advantages of this model are not only lost, but even counterproductive, that is, change to release many opponents have always been competitive pressure on LeTV's above-mentioned model.
If we say that the above is only a gap compared with the professional video content vendors in which it is located, then compared with other business partners, it also reveals the lack of value that the LeSpe ecosystem has in its own ecological logic, or which can bring value. Compared with 1% variety show ratings, LeTV coverage is less than 35%, less than half of millet TV. In 2016 Q2-2017 Q1, the Top30 TV drama, LeTV only covered more than 30%, while the millet television coverage rate was 80%. As for the content of film and television members who can really bring real money, LeTV only has a total of 6,000 films, which is one-fifth of that of Xiaomi TV.
The overall decline in the competitiveness of the hardware (incremental smart TVs) and content (to generate real value), which form an important part of the music TV ecosystem, has caused the LeTV ecosystem to finally reach the other extreme, which is to lose no time in its In-stream advertisements on television for profit. Although other Internet or smart TV manufacturers also use it as a profit model, music TV is more like no other. Do you not know that this extreme profit model runs counter to the user's viewing experience, and in the long run, not to mention that this model will not last long, and it will also have a negative impact on the sales of already diluted hardware (LeTV itself).
We believe that the biggest challenge for the future development of LeTV's ecology is not only the acquisition of Vizio abortion that has led to the sudden termination of its strategy for overseas expansion of smart TV business, but also the need to return to the domestic market to participate in cruel competition. However, this time, under the pressure of competitors, the hardware and content that had previously supported the LeTV ecosystem did not form a so-called ecological countermeasure. Instead, it was surpassed by rivals in its own independent field.
And from his CEO Liang Jun’s remarks, LeTV seems to be even more forced to give up (nostalgic, but the opponent's competitive pressures make it impossible to continue) before supporting the core competitiveness of LeTV ecosystem (from the previous value for money to the so-called high profile And high price), which is the most dangerous for LeTV ecosystem.
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