Millet LeTV Behind: Deep Analysis of Internet TV Industry

Recently, as the two major manufacturers of millet millet hit me, I called you a knife, to everyone's attention are attracted to the Internet TV industry. Lei Jun as the first person in China's marketing, of course, this is premeditated. So what is behind the abacus?

Letv sold 1.5 million smart TVs last year and Xiaomi sold only 300,000 units. In the field of smart TV, LeTV is like millet in the mobile phone industry. Most of the revenue comes from content. According to LeTV's financial report, its 2014 operating income was nearly 6.82 billion yuan, its terminal business revenue was 2.74 billion yuan, its advertising business revenue was 1.57 billion yuan, up 87.38% year-on-year; its member and issuance business revenue was 2.42 billion yuan, up 137.96% year-on-year.

Doing both hardware and content, Apple, Millet, and LeTV; both content and hardware, but most of the revenue comes from content, only LeTV.

1) Why do major companies grab Internet TV market?

In the end, it is all for the sake of interests. Lei Jun will not do anything without benefits, and it will not be a high-profile crackdown on friendly business. Before I talked about millet's three-tiered rocket model, the first level is the hardware (mobile phone, TV), the second level is the operating system (MIUI), and the third level is the application (installed in the operating system of the millet mall, watch more, video, games ,financial). Hardware can not make money, the operating system can not make money, it does not matter; to the application, there are always places where users pocket, advertising is, the mall is, the game is, financial products are.

Taking into account that millet phones and MIUI users will approach 200 million this year, this market will have extraordinary value. We assume that Xiaomi earns 100 yuan per person per year from 10% of users, and can earn 2 billion yuan each year; assuming that Xiaomi earns 100 yuan per person per year from 50% of users, it can earn 10 billion per year.

This is where Xiaomi has a huge imagination. It can do class operators. You can't escape Mobile Unicom with telephone and traffic. You can't escape MIUI with 200 million people from Xiaomi. You can't escape from Xiaomi's application. It is a mobile service operator.

Internet TV is another battlefield. We calculate the possible market size of this market:

Content: Now we pay a viewing fee of 300 yuan per year. China counts 400 million households. The annual market size of this market is 120 billion yuan.

Hardware: According to the calculation of 3,000 yuan/set and 400 million households, the market size is 1.2 trillion yuan; in exchange for 5 years, it is converted to 240 billion yuan each year.

Both add up to a market size of 300 billion yuan/year. This quantity, even one tenth, is not to be underestimated.

China's smart phone market will reach its peak in the next few years. Xiaomi will continue to grow at a high speed. Two ideas: One is the expansion of foreign markets to open India's Southeast Asian market; the other is the development of other categories. Now we look at Lei Jun wanting to enter the Internet TV.

Into the Internet TV, now there is music as a roadblocker, this must be played. And the fight is not the usual ferocity, has been accused of whether the other party is illegal. For LeTV, TV and video are its roots. Some people want to move this foundation, of course, desperately.

The end result is that you die or die, boss second child.

2) Internet TV Content: Ranking and Importance

TV, video sites, the content of the broadcast is video. Before discussing Internet TV, we first talk about the classification of video: movies, TV dramas, animations, variety shows, sports programs.

For 20-35-year-olds, the degree of attention to various videos varies according to gender:

29-35-year-old male, sort of attention: variety shows> sports programs> movies> TV series> animation;

20-35-year-old women, the degree of concern: variety shows> TV series> movies> animation> sports programs.

From this point of view, the content of young men and women who should be judged to be occupied is: men/variety shows, sports programs, movies; female/variety shows, television shows, and movies.

It can be said that whoever has quality content will be where the audience's attention is. If LeTV has "The Deadly Addict", anyone who wants to watch it will go to LeTV. If Xiaomi has "Heirs," he likes to go with Lee Min Ho. Mango TV has "Happy Camp" and people who want to watch must go to Mango TV. One thing you want to see, not seen elsewhere, there is only one place, do you say go or not?

3) Internet TV profit model

The video sites like Youku Potato and iQiyi are indeed experiencing problems. Its value is the value of the platform, but now the premium content is in the hands of others: Variety shows are in the hands of television stations, television shows are in the hands of television stations, and movies are in the hands of movie production companies.

The profit model of these video websites mostly depends on advertising, and a small amount on the payment. Because the attractive content is in the hands of others, you don't buy other video sites to buy; you buy the price is very high, the price is high and profitability declines. So this is a big problem. Youku's market value has not been high for this reason.

The only way is to produce quality content yourself. In this respect, video websites have no experience compared to television stations and movie production companies.

But Internet TV has another possibility. When you bought a TV, it was definitely necessary to watch the video content, and it was a good video content. If you run a man, please don't disturb Happy Camp Where is your father, speed and passion Tomb notes cards House of cards from the stars you, the NBA European Cup Asian Cup.

Now that there is a company that sends you a smart TV, there are two options:

1) You can only watch one variety show "Where is Feng Xia?", you don't have to pay for it; 2) You pay 100 yuan per year, all programs can be seen, and you can also block Feng Jie. What would you choose?

If it was me, in order to shield Feng Xie from choosing the second one, TV would send it, and would not care about this money. The future of television will be like this, just like today's phone bills.

For another example, let's watch Korean drama Episode 10 for free, but then look at the need to pay. In episode 10, this is the time when the hero and the heroine are in love. If you don’t care about it, you pay for it and pay for it. In short, if you have exclusive premium content, it's easy to get paid.

Ordinary content is free of charge. You look at advertising to create revenue for manufacturers; fine content is paid in small amounts, and you can watch indefinitely. As long as you use this TV, it will create revenue for manufacturers, which is LeTV's profit model. There is a conflict of interest. Take a good view of the mountain, good show behind. Slowly look slowly.

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