Last year's 4.14 Hardware Free Day, LeTV also spared no effort to express its desire to “lead the hardware free new eraâ€, buy members to send hardware, users in LeTV to spend money on content and services, “pay only for core valuesâ€. TVs or mobiles that carry content and services “do not need to spend moneyâ€.
On March 29th this year, on the so-called "longest conference in the history of LeTV," LeTV launched a new sub-series of unique split TVs. The 55-inch price is 8,999 yuan and the 65-inch price is 13,999 yuan. This action is quite a suspicion that "it is necessary to make a fortune by selling hardware." Or, the hardware must also become the so-called "core value."
At LeTV's new product launch conference, Liang Liang, the person in charge of the television business, has this statement: LeTV is only different in size, and there is no difference in performance. In this way, LeTV’s actions from “double performance, half price†to the entry into the yuan file make consumers not understand which is the real “levisionâ€.
Lack of manufacturing base, difficult supply chain control In the second half of last year, LeTV opened the “price increase†of its own products, and announced price increases twice. The main reason given at that time was “the supply chain of the upstream supply chain was insufficient and panel prices continued to persist. rise". Directly exposed problems including Internet brands such as LeTV: lack of technology accumulation and industrial layout, it is difficult to grasp the upstream supply chain.
The November 2016 panel price quoted by the International Market Research Institute IHS shows that following the continuous rise in October, mid-size TV panels, including 40, 43, 55, and 65, surged by 10 in November. Dollars.
Dong Min, general manager of Owen Cloud Network Black Division, pointed out that compared with traditional color TV companies relying on the supply chain to resolve the panel cost pressures, the panel price increase is more difficult for Internet brand operators, and it is a test for these enterprises lacking manufacturing supply chain. .
At present, the tide of rising prices of LCD panels has not receded. The data analysis of the color TV market in February 2017 released by Ovid Cloud.com showed that the price of small-size TVs with a size below 48 inches has risen significantly, with the 40-inch price increasing by a maximum of 6.7%, and the average market price is 2235 yuan. .
Since the 40-inch and 43-inch products are an important reliance for LeTV to get consumers to pay, the use of new products to disguise price increases has become an important means. In the new LeTV pricing, LeTV 40M/43M/50M price is 2449 yuan / 2599 yuan / 3299 yuan, if you choose eco-version, each must be based on the original increase of 300 yuan. This shows that LeTV's cheapest 40-inch TV is also 10%-20% more expensive than the industry average price. It can be seen that LeTV’s mood of relying on hardware for profit is very urgent.
Attributable to listed companies, LeTV Zhixin, which bears heavy profits on the main television business, is a subsidiary of listed company LeTV. According to public information at the end of last year, the latter held 58.55% of the former. The performance of the television business will certainly affect the overall market performance of LeTV.
At the end of last year, Liang Jun said in an interview with China Times that in the past, LeTV made a loss and it would be profitable in the next three years. Only 2017 can only be turned into a profit, in 2018, 2019 to achieve large-scale profits.
The 2016 semi-annual report showed that LeTV’s new revenue for the current period was RMB 7.64 billion and its net loss was RMB 56.87 million. In 2014, LeTV made a loss of 386 million yuan, and in 2015 it lost 731 million yuan.
Looking at LeTV's equity participation company, LeTV Cloud Computing and LeTV New is expected to establish a better profitability. From this perspective, to maintain the overall expectation of the market for parent company LeTV, TV business has a notable black hole. "Need to fill," the burden "is not light.
Liang Jun has said that LeTV’s efforts to achieve new profitability are mainly based on open source and throttling. Among them, in terms of throttling, LeTV will gradually reduce the loss of hardware.
Analyst Analyst Zhao Ziming once said that LeTV’s non-hardware big-screen income belongs to the concept of stealing, and LeEco adopts the mode of buying members to send hardware. In fact, it is LeTV’s all income. So, LeTV will have to obtain profits from other aspects, and the profitability of hardware is the most direct approach.
LeTV's original "hardware free" model is precisely in contradiction with the current "reducing losses" target, introducing high-priced new products, and taking the opportunity to raise product prices, enough to "hide people's attention" and at the same time, it can also release a signal. The full range of products will embark on the road to high prices.
With weak content advantages and insufficient backfeeding capacity, the terminal hardware and content services are combined to introduce the concept of “eco-TVâ€. Let’s be considered as an industry pioneer. The problem is that the pioneer may not necessarily become a martyrs.
The provision of online video services should be the audience's initial recognition of LeTV. The differentiation embodied in LeTV's launch of TV products is precisely its ability to output content on the back end. In fact, this ability has been greatly weakened this year. With LeTV losing the AFC Champions League and the exclusive broadcasting rights of the Chinese Super League, there is little real material on the content.
In terms of content, color TV manufacturers have already conducted in-depth cooperation with big-name content operators such as Tencent Video, iQiyi, China TV, Mango TV, etc., and have more advantages in video and TV dramas than LeTV and other Internet companies.
What users really care about is the content itself, not the content delivery platform. Under the background that "single broadcast" has gradually become a trend, the content that a single platform can provide has also become limited, which makes the so-called "loyalty" of users for a video providing platform not high. The content advantages originally envisioned by LeTV are increasingly difficult to manifest. In addition, the bare-bones price of LeTV, plus the cost of film and sports membership, is not only lower than the industry average price, but also a lot higher. Even if this kind of product "buy members send hardware", there is still the issue of renewals after membership expires.
As for the "relying on the benefits of subsequent ecological services" to feed the hardware, this argument is debatable for two reasons:
First, the ecological service is also facing its own loss issue. LeTV 2016 semi-annual report shows that, among its participating companies, related to the follow-up ecological services, LeTV.com (Tianjin) Information Technology Co., Ltd. has a net loss of 95.547 million yuan. Net Information Technology (Hong Kong) Co., Ltd. had a net loss of 1,881.20 million yuan. Leshi Electronic Commerce (Beijing) Co., Ltd. had a net loss of 194 million yuan. Le Shi Media Advertising Co., Ltd. had a net loss of 22.4049 million yuan. LeTV New Media Culture (Tianjin) Co., Ltd. The net loss for the six months was RMB 13.1023 million.
Secondly, Liang Jun said in an interview with the China Times that “From the perspective of the ecology of LeTV as a whole, super TV first needs to have strong enough support for LeTV's business.†Under this premise, “returning "The expectation is difficult to achieve.
Faced with the pressure of profitability and survival, LeTV’s TV business is free or even negatively profitable, and it will eventually be shattered. The recent release of a price increase signal through new products may be LeTV’s “wishful thinkingâ€, but if LeTV does not follow the previous model, its true market competitiveness can be somewhat different?
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