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In the TV industry where the competition has been full and the pattern has been set for several years, how long does a newcomer's innovation last for a long time? Recently, LeTV again took the attitude of a subversive, high-profiled to throw out the global plan of LeTV as the market, and launched a below-the-clock amount. Production cost-priced eco-type television.
Before this, LeTV directed the apple several times. Just a few days after the release of the iPhone 6s, LeTV has thrown out global plans for television and global ecological models. Jia Yueting, who has a long-sleeved dance in the capital market, is also trying to find out what kind of situation it is. Will the TV industry again usher in a new wave of price cuts because of LeTV's cost pricing model?
TV user renewal rate up to 70%
Can the ecological model make up for losses?
For the newly launched third-generation super TV, LeTV divides it into three grades, each of which lowers the price below the cost price for mass production. LeTV said that the reason why the product is priced at a cost, because it has an ecological profit model, through ecological subsidies hardware.
At the beginning of the launch of the TV, LeTV triggered different views in the industry because of the fee for bundled TV and content services. LeTV, however, reduced the bundled service fee to 0, which really made the industry once again shouted and failed to understand. At the same time, from the current perspective, LeTV terminal is still at a loss. Where does Music come from, and can it succeed with the profit model of ecological hardware?
According to Lexus, the new president, Liang Jun, said: "Lokvision will have the same price in the whole channel of marketing. It breaks the traditional online and offline product and model pricing model. It will reduce the service fee bundled in the hardware pricing of the product to 0 yuan. It indicates that LeTV is more mature and that LeTV has the ability to rely on multi-dimensional and multi-level ecological profits to subsidize hardware."
But at present, Leshi hardware, including Super TV, is still LeTV’s loss-making business, but it is also LeTV’s largest source of revenue. LeTV 2015 semi-annual report shows that the revenue of its listed company's terminal business (mainly television) is 1.893 billion yuan, accounting for 36.5%, followed by payment and advertising revenue, with a scale of over 1 billion yuan, traditional copyright and television The distribution revenue was 283 million yuan and 49.35 million yuan respectively. Its subsidiary, Super TV operating company LeTV, reported a net loss of 286 million yuan in the first half of the year. In the short term, it seems that it is not easy to balance this loss with other profits.
Industrial Economic Observer Leong Zhenpeng said: "LTV is the first of all color TV manufacturers to propose an eco-marketing model based on the entire industry chain structure. This model results in loss of its terminal. Other profits are currently insufficient to make up for terminal losses. But when it comes to television sales As more and more end-users grow, the two parties reach a certain balance point in profits and losses, beyond which profit can be formed. At present, LeTV's sales volume has increased rapidly.
Objectively speaking, LeTV has formed a huge Internet ecosystem, its video, sports, music and other resources can be shared, the hardware is free, companies can obtain considerable profits through the value-added services provided by the ecosystem.
Regarding the renewal and profitability of the super TV concerned by the outside world, LeTV revealed that an internal TV executive has reported that over 2 million TV sets have been sold and the user’s renewal rate is 70%. Letv terminal profits through the entire ecosystem, rather than pure hardware + payment.
Liang Jun said that the current ecological profit has been conceived and gradually commercialized. "Only a startup ad generates more than $10 million in revenue per month. Our pricing is not simply suicidal pricing, but rather subsidizes hardware losses through backward service revenue." He said LeTV will conduct differentiated operations for users in the future. Including film, sports, education and other sections will be subdivided into operations, this year will achieve 3 million targets.
Some people in the industry believe that: “As the entire TV industry is in the doldrums, LeTV will be under the cost of mass production. It seems to be at the expense of profits. In reality, it is to use eco-marketing cards, hoping to seize the entrance and subsidize hardware with ecological profit. However, whether this model can really sustain effective performance, it is indeed feasible.
Low-price strategy "reuse tricks"
TV industry may set off a new wave of price cuts
Although LeTV's "cost pricing" seems to be easy to say, we still see the entire color TV industry at a loss. The market demand is slowing and the competition is fierce.
Previously, LeTV had adopted the first cost-based pricing model on mobile phones. At the beginning of the launch of the mobile phone, it successfully attracted the attention of the industry and stirred up the mobile phone industry, forcing many mobile phone manufacturers to cut prices. The LeTV launched the world's first eco-TV - the third generation of super TV, in the color TV industry to cost-based pricing "returning skills", whether it will trigger a new wave of price cuts?
Liang Zhenpeng said: "At present it can be said that LeTV's hardware basically adopts a cost-based pricing model, but this time LeTV launched a new eco-TV that differs from before: hardware and services are not bundled and can be selected by consumers themselves, and no longer mandatory Bundled sales allow consumers to have a better experience, but its low-cost strategy will undoubtedly make the price war in the color TV industry even fiercer, further dragging down the average selling price of home appliances, and LeTV’s scale reached 1 million units last year. The TV industry has a certain influence and will change the status quo in the TV industry. The competition in the TV industry is even fiercer."
Hisense related person in charge told reporters: "At present, all manufacturers have their own advantages, LeTV's ecological television has long been in the TV field, yet not affect Hisense's performance."
LeTV’s dramatic increase in TV sales has also caused some traditional home appliance companies to use price wars to hit LeTV. An insider of a home appliance manufacturer stated: “A lot of TV manufacturers in the industry want to jump out of the price war, but LeTV will lower TV prices again, forcing home appliance manufacturers to increase the price/performance ratio of TVs in various forms, and even fight price wars. The price cuts of certain TV models are also inevitable. At present, most TV manufacturers are pressing for pressure to expand the 3rd and 4th levels and overseas markets and seek more profit.â€
“Internet companies have been cross-border for several years, and the combination of online and offline channels is their advantage, but the industry structure is unlikely to change much in the short term. Household appliance companies have their technological advantages and are actively transforming. Industry cooperation will become the norm, and industry cooperation will outweigh competition.†Changhong’s home appliance division said.