Radio and TV enterprises transforming the Internet into a trend transition is not easy way

Internet development trend

As of March 11, Gehua Cable's share price rose by 25% in 3 trading days due to a fixed increase of 3.3 billion yuan. According to the announcement, the company plans to invest 1.9 billion yuan in the construction of a high-quality copyright content platform and 1.4 billion in investment in cloud service platform upgrades and application development projects. In fact, since the end of last year, Gehua Cable has begun to transition from a single cable TV operator to an Internet platform. In November 2014, Gehua Cable announced the completion of the construction of the first phase of the Gehua Cloud Platform, the first large-scale cloud platform for the cable TV industry.

On the cloud platform, Gehua Cable can provide video, cloud games, cloud applications such as education, health, lottery and other services, and will also build an e-commerce platform later. In December 2014, the company joined more than 30 provincial and municipal cable network companies and initiated the establishment of the China Television Cinema Alliance. It aims to build a family viewing platform with “5 yuan to watch movies at home” and expand into the content field.

And BesTV has invested RMB 800 million in three companies, and share prices have risen in recent days. The company plans to add 400 million yuan to the video website, Fengxing.com, and increase its shareholding to 82.76%. This completes the absolute holding of the popular website and has caused widespread concern in the industry. After BesTV announced the merger with Orient Pearl last year, BesTV’s management repeatedly stated on public occasions that in the future, the company will form an Internet media ecosystem and industrial layout of “content + platform and channels + services”.

In January of this year, BesTV conducted internal structural reforms to eliminate the hierarchical management of traditional radio and television companies and set up five new business groups, namely the Internet TV business group, cloud platform and big data business group, console game business group, and telecommunications channel business group. The network video business group is completely in accordance with the flat structure management of Internet companies and hopes to make a more comprehensive transition to Internet companies.

In addition, Hua Digital Media has introduced Alibaba and jointly launched the Tmall Box product. In the future, it may also have in-depth cooperation in TV shopping and big data. Hubei Broadcasting and Television announced on February 13 that it has obtained the Ministry of Industry and Information Technology's Internet access business and Internet data. Transmission of value-added services and domestic IP telephony services. Last year, the company has signed a series of agreements with companies such as Cisco, Digital Video, and Coship Electronics. In the future, it will strengthen its layout in digital homes and cloud computing.

Wu Chunyong, editor-in-chief of the three-network convergence expert and the integration network, believes that the transition of the broadcasting and TV enterprises to the Internet is no longer a requirement of the “triple play” policy, but rather a time when their development has to be turned. "In the era of mobile Internet, the market space for TV screens has long been targeted by BAT, and broadcasting and TV companies have obvious advantages in this screen. The transformation of Internet platforms or ecosystems will gain more opportunities for development."

Transformation is not easy

Although the transition is imperative, the market competition and risks that the radio and television companies may face in the Internet are not small. Insiders pointed out that although Gehua Cable has made adjustments to its positioning and made efforts to pay for the home garden line, copyright is a barrier that does not pass. A number of high-level film and television company executives told the China Securities Journal that the Internet is an important platform, but the film's publisher is most valued as a cinema. After the film is shown in the cinema, the publisher will sell the copyright to the video site, whichever is higher. However, BAT has a huge amount of money and has invested heavily in buying exclusive copyrights for premium content. It is difficult for broadcasters to compete with them. China’s voice, running, brothers, and other hit TV dramas have all been captured by BAT.

On the other hand, traditional television manufacturers are also gearing up in the Internet field, and have already preempted card slots in terms of content and channels. Sichuan Changhong builds home Internet, TCL cooperates with iQiyi TV+, and Skyworth joins the smart TV industry alliance. These are all powerful contenders for broadcasting companies to enter the Internet.

In addition, due to the restrictions imposed by the administrative divisions of broadcasting and TV enterprises, it is difficult for businesses to expand across the country. Wu Chunyong stated that more than 95% of Gehua’s main business income comes from Beijing. Although its leading TV theater alliance is regarded as the first step for the company’s cultural exports to the whole country, it will inevitably be affected by local broadcasting Business competition. The BesTV of Shanghai and Huadian Media of Zhejiang would also like to extend their business to other provinces and cities.