Following on June 19, BesTV officially changed its name to the Oriental Pearl, the A-share largest media carrier announced on the 23rd the B2C specific strategy of the Internet TV Business (OTT).
"From today, the Oriental Pearl officially opens the B2C strategy of Internet TV. In the future, the OTT business will form a two-pronged B2B and B2C structure, which will give more clear support and a final destination for the target of achieving 30 million monthly active users in three years." Oriental Pearl President Ling Gang spoke bluntly when he was interviewed by a 21st Century Business Herald reporter.
Ling Gang’s B2C strategy began with the introduction of two heavyweight strategic partners: Siu Chi shares with Qingdao Haier. According to the information disclosed by this pre-Siu Chi share, the company plans to issue no more than 297 million shares in non-public offering at 12.36 yuan/share, raising funds of 3.671 billion yuan, among which, Oriental Pearl, Shanghai Media Group and Qingdao Haier are planning to subscribe for 2.2 billion yuan respectively, 11 100 million yuan and 371 million yuan.
Through the form of capital marriage, the Oriental Pearl (and major shareholder Shanghai Wenguang Group), Zhao Chi shares and Qingdao Haier have formed a unique "iron triangle" camp. In this regard, Ling Gang said: "Before this combination, there is no company in China to follow this pattern in the B2C strategy of doing OTT business. This is an innovation and exploration."
OTT emerges "Iron Triangle" alliance
Since the Oriental Pearl announced the reorganization plan in November last year, the OTT business has always been the most important layout of newly listed companies. However, unlike LeTV and Xiaomi’s terminal strategy of using “smart TVs + boxesâ€, the Pearl Oriental’s previous promotion was focused on the B2B field, using cooperation with China Telecom (Yue Me), and participating in Gehua’s cable and radio and television networks. Radio and television company listed companies use DVB + OTT model to tap Internet TV users.
Although the short-term effect of the B2B model is significant, in the long run, if the Oriental Pearl lacks the support of the hardware terminal, it may not be able to penetrate the B2C field. This is tantamount to turning a blind eye to the competitors' market.
Ling Gang said: “Oriental Pearl is a relatively traditional listed company, and its historical accumulation has given us B2B's channel advantage. However, B2C is a very important sector in the market. If we do not exert our force in this area, we must achieve 30 million for 3 years. The user's goal will become very difficult."
While the Pearl of the Orient faced a bottleneck, Zhao Chi shares also encountered the troubles of the company's strategic transformation. The ODM manufacturer from Shenzhen has independent intellectual property rights in the field of television hardware. However, due to its long-standing problem of locating itself, Mega Chih shares more of a role as a foundry player, and the lack of brands and channels has also become an important obstacle to the further development of the company.
Mr. Kang Jian, president of Mega Holdings, revealed: “Based on the new changes in the entire industry, the company has made a strategic transition of the Internet+, which is why it chose to join hands with the Oriental Pearl. At present, OTT has become a battlefield for BAT and video sites to compete for cross-border. TV manufacturers have also launched related products, and the ecosystem of the future industry will surely undergo drastic changes. OTT will become the decisive product in changing the industry's ecosystem in the next 5-10 years."
At present, in the division of the “Iron Triangle†Alliance, Oriental Pearl is mainly responsible for the OTT brand, license, cloud technology and content output. In addition to the roles of hardware design, production, and sales, Zhao Chi is also responsible for Follow-up hardware platform and user operations. "Siu Chi shares hope to work with us to maintain a sustainable income," said Ling Gang.
Kang Jian said that Zhao Chi shares will participate in the profit sharing of the later operating platform. Although the proportion of sharing is temporarily inconvenient to disclose, Zhao Chi will certainly use this cooperation to step out from a pure manufacturing model and eventually move from the background to the front desk.
And Qingdao Haier, another protagonist in the "iron triangle," is slightly low-key. According to reports, Haier will rely on its offline sales and after-sales service system throughout the country to provide sales and service support for the Oriental Pearl OTT business.
After the B2C battle force
The big question now facing the Oriental Pearl, Mega Shares and Qingdao Haier is that compared to Leshi and Xiaomi, which already have obvious first-mover advantage, how can they be proactive and curving?
Among these, the cost advantage will not be ignored. Kang Jian said: "In addition to the Foxconn OEM, LeTV has a portion of the TV set that is made by Siu Chi. Therefore, LeTV does not have a cost advantage. The foundry family itself is required to seek commercial profits. It is not a professional TV show designed by LeTV. The hardware design cost of the product itself will also be high."
With its own independent intellectual property rights and a full set of production lines, Zhao Chi shares it as one of its own advantages. "The competitiveness of the company in terms of design, manufacturing and cost will combine our strengths and enable us to combine the content of the Oriental Pearl and find a competitive package." Kang Jian said frankly.
"For example, the 55-inch smart TV with an average market price of 3999, because all of our intermediate links are not available, may give customers as little as 3699. The price difference plus rich content will have a plus in the user's choice."
According to the plan of the “Iron Triangle†camp, the first smart terminal TVs will be available in the fourth quarter of this year, and its three-year shipment target is 10 million units. Specifically, its shipment in 2016 is expected to be about 2 million units, and in 2017 it will be about 3.5 to 4 million units.
In addition, another concern is that the popular network may play an important role in the B2C battle.
According to the previous announcement, Oriental Pearl Group will list its popular website, intends to transfer 63% of equity to seek strategic partners to use its advantages in home audio-visual consumer electronics R & D, design, manufacturing and sales, and jointly accelerate the advancement The specific implementation of the OTT business and B2C hardware strategy.
If there is no accident, it is highly likely that the company will be able to connect to Oriental Pearl's capital, brand and internet platform. However, the Oriental Pearl has not commented on this yet. Ling Gang told reporters: "The popular network now has more than 200 million downloads, more than 33 million daily active users, the company hopes to be able to through the marketing initiatives will be popular users of the popular network directly into OTT users, which is precisely its value Where."
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