A few years ago, internet companies that initially focused on streaming media and music began to enter the traditional television industry, applying internet-based thinking to manage the entire supply chain. Terms like price-to-performance ratio, hardware subsidies, price wars, and ecosystem strategies became their core strategies. While the market was booming, consumers found that the products they bought offered excellent value for money.
However, by 2017, internet TV brands started facing serious challenges. Rising raw material costs and new real estate policies created uncertainty in the industry. At the beginning of the year, LeTV’s stock price kept falling, and its capital chain broke down. With unprofitable hardware sales, the TV business also suffered from the ecological subsidy model. It remained unclear how long it would take for the TV segment to return to previous levels.
In the first half of 2017, color TV sales continued to decline for the first time in five years. Sales dropped by 5.3% in the first quarter and fell further in the second quarter. The total sales volume of color TVs declined by 7.3% during the first half of the year. Faced with this severe downturn, the days of internet brands were far from easy. Their market share dropped by 4% compared to the same period last year. Internet TV brands now face greater pressure and must find ways to break through the intense market competition.
So, where should internet brands start to get out of this difficult situation?
First, technical innovation alone isn't enough. Technological development takes time and cannot be rushed. Most TVs currently sold are LCD models, while high-end models use quantum dots, OLEDs, and lasers—areas where internet brands struggle to compete. In terms of hardware, achieving a competitive edge is also challenging.
With the growing popularity of artificial intelligence, AI-powered TVs have become another key area of competition. Artificial intelligence is a field of science focused on developing systems that simulate, extend, and enhance human intelligence. For the TV industry, analyzing user viewing habits and personalizing content is more feasible than competing in hardware innovation.
Changhong was one of the first to introduce an AI voice control system. In March of this year, Changhong showcased a new smart home solution centered around AI TVs, such as the Q5N model, which connects various household appliances.
Xiaomi launched its first AI TV in 2016, and today, its AI voice recognition has become more accurate. Combined with Xiaomi PatchWall, the TV offers a more intelligent experience. Storm TV introduced a smart TV called X5, redefining traditional internet TV and turning the TV into an AI assistant. Micro Whale has partnered with HKUST to promote smart speech technology on smart TVs. TCL's internet brand, Thunderbird, also features AI capabilities like voice control and application analysis, making TVs more intelligent.
In terms of content, internet brands aim to differentiate themselves by acquiring exclusive video sources, sports rights, and other premium content. For example, PPTV secured the broadcasting rights for La Liga, while Storm TV, Fengxian, and Mango TV offer their own exclusive content. Xiaomi collaborates with iQiyi and Sohu to provide a comprehensive viewing experience.
Although the color TV market seems to be weakening now, it remains much stronger than it was at the beginning. 2017 was a crucial year, and many internet brands faced significant pressure. They hope to drive change through AI and differentiated content, finding their place in the competitive market and avoiding elimination. The development of AI in TV is still in its early stages, and there is a long way to go before it reaches its full potential.
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