Eight Trends of Internet TV Industry in 2015

The following is a short speech:

Cheng Hongrong: Hello, everyone. Today I suddenly felt that I had made a smart choice. Originally, today's theme is self-control and solo broadcast. This topic may be the most powerful thing for South China Satellite TV and Hunan Broadcasting and Television. However, I do not know which nerve is wrong. I did not do this topic, but chose the direction of future development. Otherwise, today I have just become the "old, decadent TV station's strength" expressed by Yang Weidong's mouth.

Today's theme is called Returning to the Living Room, the trend of the Internet TV industry in 2015. Why did you choose such a topic? Another year has passed, and at the end of the year, we will summarize how this year's industry "harvest" is. What is the expected value next year? In 2014, in such a network audio-visual industry, it can be said that the industry of Internet TV should be said to be the first to receive the most attention. All employees this year will also feel the status quo that cannot be controlled by the heart. Therefore, we also want to use this opportunity to chat with everyone in the room and discuss the future of Internet TV.

Last time, we joked how the Internet approach was understood in a philosophical way. What is it? Where does it come from? Where does it go? Nothing will be created for no reason. It will not come out of nowhere. Internet TV, in fact, is a kind of video service in the living room, and cable TV, IPTV, OTT, will become your family's choice in the future. But how did it come about and emerged?

The teacher Wu Xiaobo spoke very well this morning. At present, we are experiencing the third wave of the Internet. The Internet is the history of the entire human development. The first is the development of informationization. From the earliest flying pigeons to the phone, to the way you email to today. The Internet has not been around for a long time. In just 20 years, we have experienced two stages today. The first stage is the connection between the industry and the industry. At that time, we said that it was "enterprise informatization," and we used e-mail to recreate the internal electronic flow of the company. The emergence of QQ in 1999, we entered the second stage, that is, personal information, is a connection between people. Today, another 10 years have passed. Today, great changes have taken place in the personal informationization and people's lifestyle has undergone great changes. Next may be the interconnection between home and family, that is, home networking, the Internet, the Internet of things, everything can be connected in the future. This wave will certainly surpass the previous two processes and will be accompanied by a huge wealth effect. Internet TV, as a natural heavy application in the living room. Can this heavy application become a heavy entrance in the future? At least in today's and the foreseeable future, it can become a heavy application.

Internet TV, first of all, is determined by the trend of the evolution of the Internet, and the other is the maturity of the external infrastructure, the intelligentization of terminals, the use of Android in various devices, and the popularity of China’s broadband strategy. In Hunan, the province has now upgraded to 8 trillion for free. In Beijing, I heard that the start is 20 trillion. In this way, Internet TV has a foundation for development.

Internet TV began in 2012 and the State Administration of Radio, Film and Television issued a license. In the first stage, we call supporting services. No matter pushing a box or pushing a TV, we will push such services to users. This process does not make much difference to the previous cable TV and IPTV. Is nothing more than a hardware upgrade faster than before, the experience is better than before, can support better standards, such as support for 3D, Dolby, 4K, than the previous cable and IPTV has made some progress. But there may not be a real change in real service.

From 2014 to today, the opportunity for the future has evolved to the stage of Internet TV 2.0. After experiencing such a process, it has experienced the development of users, and the number of users has undergone qualitative changes since quantitative changes. Our large number of uses are based on certain technologies. More understanding, they did not enter the ordinary home users. Next, there has been such a trend. In such an environment, the trend of user satisfaction, as well as a variety of refined services, including better service experience will appear.

In November, we walked outside and took a few of the larger international Internet TV vendors that have won names on the international market. Through communication and learning with them, including the communication with many old friends in China, we share with you the development trends that can be summarized in the future. There is something wrong to discuss together.

First, Internet TV will still have an explosive growth in the number of users starting next year. Starting in 2015, or from the end of the year to the end of the year, it may actually become one of the choices for your home video service, rather than the current cable or IPTV supplements. Can it become a "three pillars" and become a complete product? There is also a need for breakthroughs in some policies, such as live streaming. It does not mean that I must go to see that thing, but the integrity of this function is an essential function when the user regards this product as a substitute for another product. In the live broadcast, we do not discuss whether it can be opened, but when communicating with managers, live broadcasts are not politically insurmountable. With respect to live broadcasting, more is a consular strategy in the protection of the industry or other aspects. In the future, we can expect that Internet TV will become an integral product.

The current subscriber size of cable TV is 224 million and IPTV is 32 million. The number of Internet TV users in 2013 is about 10 million. Today, there are no more than 30 million Internet TV users, but this is a big development. Through two years, it has reached the number of users of IPTV for eight years. In 2015, we believe there will be double growth.

The second trend is that the social cooperation between cloud, management, and end will be more clear. The production relations are very clear today. Cloud services, pipelines and equipment have already begun to form a very clear partnership. Everyone is doing their part in various aspects and doing their best and most professional things. At present, this trend is developing in the entire society as a whole. In Internet TV, there are seven licensees for cloud services, and there are also current video companies. More and more professional content service platforms have begun to appear. As channels and terminals, we will also see hardware brands, including branding effects. Unlike before, providing a full service, such as cable or IPTV, is actually providing services from the service to the channel to the device. Internet TV is different from the obvious features of the previous two businesses.

Third, the content will become the core competitiveness of the development users. We all know that everybody from Youku to Tudou, to iQiyi, has emphasized the importance of exclusive content and distinctive content to the development of users, and to the shaping of the brand and the creation of profit models. From the perspective of the content's pyramid structure, the content of the pyramid's tip will become a competition for users' programs. I will explain later.

The first one is Ericsson's 2014 global television and media development report. The content richness and video quality are more important. After the "Card House" was launched in February 2013, the number of users increased by 3 million to 29.2 million. When it launched a series of self-made, single-play programs, the number of users has experienced a very rapid growth. "House of Cards" is a well-known product that we know. Apart from "House of Cards", we also do a lot of homemade content. Including the beginning of this year, there will be even more action. Please use China's Chen Chong, and the production of "Marco Polo" has reached a very good level. Attracting users to build profitable models is critical.

We summarized the self-control actions of major participants in the video industry. In addition to the content of Youku and iQiyi that you introduced today, Mango has returned to the best areas. Our competition is relatively not like it used to be, and it seems to be weaker than websites in the Internet. Just like climbing a mountain, the current website is going to make up a link in content production.

Paying for premium content will become a natural behavior for users. For quality content, we have to define what it is. The quality content is not limited to the familiar content and TV series. Yang Weidong just talked about a lot of their self-manufacturing in terms of content production. This is one of the reasons why it is very important for users to pay. For our own mango TV operating data, this benefit is obvious. In addition to the usual video-on-demand service, we did another free brand called Mango Life Show. We have weekly performances at some specific locations in some cities. Every half month there will be a large-scale concert and various forms of deduction, including drama and music. The driving force for the users in this way is obvious. This is one of our premium contents. Netfix 2014 third quarter financial report reality, the total number of users exceeds 53.1 million, the third quarter should receive 1.409 billion US dollars.

The situation in Europe is similar, and the acceptance rate for on-demand users in Europe is also high. Hunan's IPTV, the proportion of value-added users exceeds 30%. This is also through the operation of our users, allowing users to generally accept our value-added payment, which also provides a good reference for Internet TV.

This is the data of the White Paper on the development of China's Internet TV in 2014. There are 45.2% of users willing to pay, such as single point, monthly subscription, and annual subscription. Mango current charging time is not long, but the growth rate is very fast, basically every month, we are growing at a rate of 50%.

The fifth trend, regarding the influence of Internet TV on consumers, is more of a hardware brand or a terminal brand before. In the future, it can be seen that the content service brand + hardware product brand will become the two products the user chooses. One of the factors. In foreign countries, we will see a lot of people buy a TV or a box, open the interface, there will be several service providers in parallel, we communicate with Netfix, this is a two-way choice behavior. This will slowly become one of the considerations for users to choose Internet TV, and they will see an obvious feature, such as what the characteristics of Mango's content are, and will choose according to their own needs.

The sixth is about multi-screen interaction. We do not mean that the same service is implemented on multiple terminals. In this case, we did it very early. But does the same content maintain the same viewing experience on several terminals? After our operation for more than two years, this is not the true appeal of users. Hunan TV station made a barrage of television at Golden Eagle Festival. They were very fresh in the industry and in front of the TV audience. When we watch NBA games, this feature is very active and there will be a lot of barrage information. When we first looked at it, it seemed weird. You thought that when you watched TV, there was a lot of information flying around and you were not used to it. But when you are a little used to it, there will be a natural choice. Do not want to see, you can shield the barrage information, you want to see will see very clearly, you can have a strong sense of participation.

We found some data through the survey company. Many users would habitually use various social software to comment or interact while watching TV. Current U.S. videos, especially PGC companies, are mainly building their official website on Facebook and video on youtube. This is a combination of interaction and profitability.

The seventh trend is that the important channel for content recommendation comes from social communication. How do we embody social networking on the TV terminal? Or how to use social?

It can be seen that some of the current foreign seniors practice. They have a very important channel. They will put the content that your friends watch, or the content that your friends recommend, in a prominent recommendation location, letting you see what your friends saw and recommended. Communication between people and people will have some common topics, including recent popular movies, including variety shows. What are they looking at? We usually have such a topic in our communication. When you watch a show and you feel good, you can also recommend it to your best friend.

The eighth trend is the multi-role personalized service of Internet TV. Many manufacturers may say that we have done a personalized service, and we will recommend relevant content based on your usage. A family of three may use the same account. We can create multiple roles for you in the same account, such as the male owner, the mistress, or the child. You can set your own role under the same account. When your role is determined, I can better recommend what you really like. Previously, under the same account, so-called personalized services were virtually impossible to do. You can also watch, children can see, and their wives also watch. Such a system can't recommend it to you. Men love to watch programs or women love to watch. The viewing behavior is all on the same platform and it is difficult to recommend content for you. When you divide the role of service, many problems will be solved. For example, your viewing history will be saved under your own role. All this is to meet the individual needs of the user. So-called big data analysis can really play a role.

From the white paper on Internet TV development, we see that the average family is mostly 2-3 people. At present, we are all working under the same account. Just as Chen Haoyuan just said, the child will use his account number to play the game to a new progress.
This is a different role under an account. You can set goals for your own role.

The process of Internet TV, from 1.0 to 2.0, is not simply to connect television to the Internet, nor to allow video to occupy the TV, but to meet the new needs of users in the living room under a new environment and a new industrial structure. With our mature environment and various conditions and mature foundations, we are very confident that Internet TV will have a rapid and explosive growth for the foreseeable time. Thank you all.