In 2017, the Internet TV industry was still far from being peaceful. From the struggle between regulatory authorities and market players to capital-driven alliances, from the ambition of challenging traditional television to the integration of artificial intelligence, and from the challenges of monetization to the evolving landscape of big-screen ecosystems—this sector was full of turbulence.
Of course, even more troubling was the situation faced by LeTV, once a dominant player in the market, now struggling with numerous issues.
First, there's the issue of order. The industry is vibrant, but it's no longer as chaotic as it once was. The transition from disorder to order is a sign of maturation. This shift is evident in policy changes: major platforms like iQIYI, Tencent Video, Youku, and PPTV have aligned themselves with Internet TV licensees, while China Mobile’s previous violations were brought under control. The entire industry chain has gradually returned to the path set by regulators, and licensees are likely gaining a deeper understanding of the challenges they face. Although the industry isn’t fully compliant yet, it’s moving toward a healthier, more sustainable direction, laying the groundwork for future policies such as live broadcasting access, application management, and billing systems.
On the terminal side, by the second quarter of 2017, the number of digital cable TV subscribers reached 208 million, while the total number of Internet TV integrated TV + set-top box terminals hit 245 million. Considering activation rates, replacement rates, and operational efficiency, the number of active Internet TV users had just surpassed 150 million. While it may take time to fully replace traditional TV, the reach of Internet TV is already vast. Whether through smart TVs or IPTV, Internet TV has taken a clear lead in terms of terminal capabilities.
The business model is another area where progress is being made. Monetizing Internet TV has always been a challenge, but as user habits around online video payments develop and the scale of Internet TV grows due to broader coverage and increased usage, the business model is becoming more mature. Payment and advertising services have grown into multi-billion-dollar markets. With the decline of traffic bonuses on PCs and mobile devices, the potential of TV screen traffic is only beginning to be tapped.
However, challenges remain. Despite the growth, the industry still faces significant hurdles. Future TV CEO Li Ming acknowledges that there is still much work to be done in terms of industry standards, business model development, and deepening vertical integration within the supply chain.
One key issue is the lack of unified standards. In an era where data drives productivity, intelligent, refined, and personalized operations are essential. Yet, Internet TV still lacks a comprehensive standard system, which hinders the efficient operation of the industry.
Another challenge is the lack of horizontal coordination among industry players. Asymmetric information and poor communication channels lead to wasted resources and limited service development, especially in areas like payment and advertising.
Vertical integration is also lacking. While the industry is maturing, the depth of integration based on large-screen scenarios, content, and high-quality products needs further exploration to achieve refined commercial operations.
Looking ahead, the Internet TV Working Committee, led by Future TV and supported by the State Administration of Press, Publication, Radio, Film and Television, aims to unify the industry and promote standardized development. Its role is not just about policy coordination but about building a cohesive ecosystem that brings together all stakeholders.
As Li Ming envisions, the committee will continue to attract partners from various sectors, creating a unified market that includes licensees, content providers, telecom operators, hardware manufacturers, and more. Each participant should have their interests respected and a fair share of the market.
In the end, the success of this initiative depends on the leadership, vision, and commitment of its members. As Lei Jun once said, “Do a lot of friends and engage the enemy in a few.†The road ahead for Internet TV in 2018 will still be tough, but with organization and collaboration, there is hope for a healthier and more sustainable future.
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