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South New Media Yao Juncheng: New Era - 2018 OTT Takes Advantage
On December 1st, the 5th China Internet Audiovisual Conference’s Theme Forum – Internet TV Industry Summit took place in Chengdu. This event focused on the latest developments and future directions of the internet television industry. With the theme “New TV Value,†the forum aimed to foster discussions on innovation, industrial development, and practical applications. During the meeting, Yao Juncheng, Senior Vice President of Southern New Media, delivered a keynote speech titled “The New Era, 2018 OTT Takes Advantage.â€
[Image: Yao Juncheng, Senior Vice President of Southern New Media]
The new era of big-screen television is about to begin.
1. The number of large-screen TV users has grown rapidly, signaling the start of a new era for big screens. In the first half of 2017, OTT users reached 390 million, making up 52% of the market. According to reports from the China Electronic Information Industry Federation, the PC internet market is developing slowly, while mobile internet growth has slowed due to the end of its demographic dividend. Meanwhile, the large-screen economy is experiencing rapid growth, with projections that it will surpass mobile internet in scale by 2018.
2. The three-screen user split is driving the growth of large-screen users. The shift in time and scene usage reflects a return to living room culture and a higher demand for quality life. While the size of cable TV users remains stable, the expansion of IPTV and OTT users supports the overall growth of large-screen users.
OTT is leading the new era.
1. From 2011 to 2016, the industry moved from chaos to initial stability. During this period, terminal manufacturers and internet companies explored the OTT space, offering products to capture the market. From 2011 to 2015, regulatory control was introduced, with comprehensive oversight from the radio and television sector. By 2016-2017, the market began to grow steadily, driven by policy stability, product innovation, and content optimization. From 2018 to 2020, the market is expected to enter an explosive phase, with rapid user growth and OTT becoming the core of home entertainment.
At the policy level, there are three layers of supervision: macro-level, content-level, and platform-level. From 2010 to 2011, seven radio and television organizations were granted OTT licenses. In 2011, SARFT issued Article 181 regarding operational management. In 2015, four departments issued Circular No. 229 to crack down on illegal TV equipment. In 2016, Decree No. 6 was issued to regulate audiovisual program services, and in 2017, SARFT issued further notices to strengthen network audiovisual management.
At the market level, from 2011 to 2017, the internet TV industry experienced several ups and downs, shifting from a terminal-first model to one led by license supervision. With the industry's integration and interconnection, all parties including terminal manufacturers, internet companies, and content providers are working together to push internet TV toward the heart of smart homes.
From 2017 to 2020, the industry is expected to move from a small upsurge to a full-scale outbreak.
One trend is the return to entertainment value. Users are returning to the living room culture through OTT, which offers richer experiences via technologies like 4K/8K, video games, and AI.
1) OTT content is becoming more diverse, specialized, and high-quality. By mid-2017, OTT had over 54,000 online content resources, with 14,000 new additions compared to 2016. 87% of high-quality content is available on OTT, driven by strategic moves from BAT and healthy competition.
2) TV apps are boosting the return of living room culture, with great potential for video games. By mid-2017, 15% of OTT devices had third-party app stores. As TV apps grow, the living room culture is set to become more mainstream.
3) AI is enhancing smart home entertainment. In 2017, AI became a standard in TVs, with voiceprint recognition and IoT integration making it a key gateway for smart home interaction.
4) 4K and 8K upgrades are redefining the TV experience. 4K TVs have been popular for years, and 8K is now emerging as a trend, with manufacturers launching consumer-grade models. Netflix, Youku Tudou, and Huawei are investing heavily in 4K content.
Another trend is the return to business value. As PC and mobile markets slow, the big screen economy is expected to be the next commercial growth area. OTT has capitalized on this shift, generating revenue through user payments and advertising.
1) User growth is supporting commercialization. With 150 million smart TVs in China, this number is expected to reach 400 million by 2022.
2) Multi-screen linkage is increasing paying users. In 2017, OTT paid users reached 10 million, with revenue at 800 million yuan. By 2020, this is expected to grow to 50 million users and 5 billion yuan in revenue.
3) OTT advertising is booming, complementing traditional TV ads. In 2017, OTT ad revenue reached 1 billion yuan, with forecasts of 2.5 billion by year-end.
4) Non-audiovisual OTT apps are entering a phase of rapid development.
OTT is leading the family smart networking era. Over the past decade, the living room has undergone a transformation, with digital, interactive, and smart features redefining home entertainment and intelligent networking.
Southern New Media (SNM) is taking advantage of these trends.
1) SNM platform and capabilities:
- High-quality technical service: Advanced, efficient, and powerful.
- Integrated broadcast control platform: Safe and reliable.
- Secure and ecological OS system: Supports 4K, multi-screen interaction, and smart home functions.
- Quality content: Backed by Guangdong Radio and TV and partnerships with Tencent, Sohu, and others.
- Product matrix: Includes cloud-based and terminal products.
- Terminal products equipped with SNM’s integrated broadcast control platform.
- APK products with SNM’s operating platform.
- Six core advantages of cloud audio-visual series APK products.
2) Win-win cooperation: SNM collaborates with terminal manufacturers to bring value to partners.
3) Future prospects: SNM is integrating production and finance to drive value creation, forming alliances in 4K, VR/AR, and TV gaming, and establishing a new media investment fund.