The Development Strategy of Wired Network Company under the Background of Triple Play

Since entering the “Twelfth Five-Year Plan” period, the digitization process of China’s radio and television transmission network has continuously accelerated and made substantial progress. The survey data of the coverage and ratings of the Beijing Medialand Media Communication Strategy Consulting Co., Ltd. (hereinafter referred to as CMMR) shows that as of August 2013, the number of cable digital TV users in China reached 188 million, an increase of 18.77 million over the same period in 2012. The proportion is 54.3%, and it is far ahead of other various receiving methods with a large advantage, becoming the dominant broadcast television reception method in China. Correspondingly, the scale of provincial and municipal cable TV public network (simulation network) users has been decreasing year by year. In 2013, the number of users of China's simulated network was 63,611,000, which was a decrease of 33,922,000 units compared to the same period in 2012, and the use ratio decreased to 18.4%. Among the various types of receiving methods, it is still ranked second, and still plays a more important role in the national broadcast and television transmission.

However, it is worth noting that with the gradual emergence and continuous development of live satellite digital television, IPTV, and network set-top boxes in recent years, cable companies are facing a serious situation of user loss. In China's rural and remote areas, with the solid advancement of radio and television “village-village” and “home-to-door” projects, the number of direct-to-satellite digital TV users has steadily increased since 2010, and the proportion of usage has increased to 13.9% in 2013. It became the third radio and television reception method after cable digital television and analog network. In the past two years, the rapid increase in the number of broadband access users has promoted the rapid development of IPTV and increased its competitiveness. Online set-top boxes and Internet-based free videos have provided young users with a wide range of choices, which has caused a diversionary pressure on cable TV. .

In view of the current status of the above wired network and the fragmented trend of users watching video programs, cable network companies should organically combine their own advantages with Internet thinking, improve the quality of content and increase promotion efforts, and take the road of integrated development.

I. Actively realize network integration and digital transformation, accelerate capital integration

The degree of integration of cable television networks and digital conversion efforts are two important indicators for assessing the progress of cable television network companies. The degree of integration reflects the scale of the cable television network, namely its coverage breadth and value proliferation capabilities; the degree of digital conversion reflects the quality of the cable television network, namely its technical depth and value penetration capabilities. The degree of integration and the degree of conversion have comprehensively measured the construction of cable television networks at all levels from two perspectives.

The broadcast television cable network is an important infrastructure for transmitting broadcast television programs and carrying out information services. In 2013, the percentage of television viewers in China who received the cable television public network exceeded 70%. The public television network is the main source for viewers to receive television program signals. China's cable television network has a strong political color and has been established in a bottom-up mode. Its main operations are scattered at all levels of radio and television departments in the country. In the same city, there will also be multiple provinces, cities, districts, counties, and other wired lines. The cross-over coverage of television networks has caused the complexity of China’s cable television network structure and the obvious regionality. With the advancement of the integration of cable networks, the merger or splitting of administration or marketization has continued, and the network landscape is still in a state of constant change, exacerbating its complexity. In this context, municipal wired network companies need to follow the “government-driven, market-oriented operation” approach to do a good job of the city's network integration work: it is necessary to speed up the pace of integration in the city, but also in-depth county township, for the full integration of "a The province has set a good foundation for the network.

Digitalization as a profound technological revolution worldwide has promoted the digitalization of broadcasting and television in all countries of the world. China's advancement of digital broadcasting and television is also an inevitable trend in the development of science and technology. China's cable TV digitalization adopts the idea of ​​converting cable digital TVs. The cable TV networks in various regions will accelerate the overall transformation of digitalization of cable television and the two-way transformation of the network in accordance with the overall requirements for the nation's digitalization. According to CMMR National Coverage and Rating Survey data, as of August 2013, the users of the national cable digital network have far exceeded users of cable analog network, accounting for 75% of the total number of cable TV users. Each cable network company should grasp the historical opportunities and accelerate the digital upgrading and transformation of cable networks to provide convenience for new services such as high-definition television, interactive television and broadband Internet access. Digital transformation is not only the trend of technological development and the requirements of national policies, it is also the top priority in improving user satisfaction and dominating the fierce market competition.

It is worth noting that cable network companies, as companies enter the market, most of them are facing the plight of insufficient funds. Therefore, in recent years, cable network operators have successively landed on the capital market to accelerate the pace of network integration through the new capital dynamics brought about by listing financing. At present, listed companies in the A-share market on the cable network include BesTV, Hua Digital Media, Jishi Media, Gehua Cable, and E-Media. Radio and television network companies such as Suzhou Radio and TV and Guizhou Radio and Television are also actively seeking for listing. In March 2014, Shanghai’s “Large and Large” merged to become the protagonist of Shanghai’s cultural asset reform; in April, Hua Digital Media’s plan was approved for approval. Ma Yun and Shi Yuzhu invested RMB 6.5 billion in shares, and Huada Group and Alibaba Group announced Achieve strategic cooperation. Cable network companies should actively clarify the appropriate divisions and clear boundaries between the public welfare attributes and industrial attributes of Radio and TV Networks, use capital financing to build content and channels, and achieve breakthrough and leapfrog development.

Second, apply new technologies, embrace the Internet, and seek multiple ways of cooperation

With the development of the Internet and the advancement of mobile information technology, Internet TV has gradually emerged and developed rapidly, quietly changing the traditional video service industry. Video signal transmission will be transferred from private networks such as radio and television networks and telecommunications networks to the public network. Internet television can be transmitted to video users at a lower cost through the open Internet, thereby breaking the long-term dominant position of the broadcasting and TV industry. Although Internet TV is still in its infancy, its momentum of rapid development is not limited by cable television networks. In 2011, the former State Administration of Radio, Film and Television issued “Document No. 181” and “Requirements for Operation and Management of Internet TV License Organizations”, which largely protected the cable television network and allowed access to only seven licensed Internet TV content integration platforms. In July this year, the State Administration of Press, Publication, Radio, Film and Television Bureau's policy on strict regulation of Internet TV continued to ferment, and Internet TV boxes were severely rectified. It is unknown how long policy protection can last. However, for cable network companies, it is not desirable to take care of them, and it is not advisable to follow the trend of development. Actively applying new technologies and embracing the Internet can achieve long-term development.

On the basis of cable television, cable network companies can try to build a "DVB+OTT" video platform, reduce the investment in network transformation through the use of open Internet, and expand the coverage of users and terminals in the broadcasting and TV industry. DVB+OTT is essentially a change in the operating mode of cable network companies, from the original self-closed to gradually open, and close to the Internet model. Cable network companies need to deeply analyze the development advantages of Internet TV, and think about how cable networks embrace the Internet. The use of big data as an Internet tool enables users to accurately analyze data collection, analysis, and processing to better understand the user's behavior and behavior patterns. Traditional cable network companies can provide users with the necessary content at the right time according to the Internet's big data technology, improve service quality, and enhance user experience.

Cable network companies should actively develop a variety of cooperation methods, carry out linkage strategy, and enhance overall competitiveness. On the one hand, we will strengthen the cooperation between net and Taiwan and establish an effective linkage mechanism between broadcast and television networks and television stations. For example, Gehua Cable has accelerated the transition from a single cable TV carrier to a full-service integrated service provider, and has cooperated with CCTV-6 subordinate companies to acquire two major TV shopping channel platforms. On the other hand, we will strengthen the network media linkage and promote the win-win cooperation between the broadcasting and television networks and new media. For example: Chongqing Cable TV Network Co., Ltd., Chongqing Radio and TV Group and LeTV.com signed a "strategic cooperation agreement." In addition, cable network companies can also strengthen linkages with telecom companies, rely on their rich access network and pipeline resources, give full play to their own resource advantages, and achieve a win-win situation.

Third, develop the content industry, develop new business, and achieve diversified development

In the video service industry, whether it is cable TV, IPTV, or Internet TV, video websites, content is always the core and is the most important magic weapon for attracting users. The production, transmission and coverage of radio and television content are inseparable. Therefore, cable network companies can use this advantage to actively develop Internet TV content services featuring radio and television.

1. Take advantage of the cable TV live broadcast. Observing Internet TV and video websites, it can be found that most of its hit series and variety shows are broadcast on cable television. In short, live cable content is not only for TV viewers, but also for Internet TV and video website users. Therefore, in terms of live broadcast services, cable network companies must build themselves into a high-quality platform, break functional limitations, and continue to promote the popularity of high-definition terminals, the popularity of two-way network access, and the interaction of VOD platform construction.

2. Give full play to local and platform resource advantages. Compared with Internet, IPTV, and other emerging media, the main viewing audience of traditional TVs is housewives, elderly people and children. For these mainstream viewers, cable network companies can arrange and process video content from different sources and provide them with Internet content that is not available on traditional cable television, such as overseas blockbusters and serial dramas that are allowed to air on video sites. Appropriately broadcast non-star TV programs and Internet UGC (User Generated Content), etc., or provide local information services such as community videos and nearby commercial discount promotions to enhance the appeal of traditional TV users. Some content that appeals to young, highly educated Internet users can also be added to rethink the interest of television in this segment of the population. The above two methods may achieve “to allow faithful users of TV to be more faithful and allow Internet users to enjoy Internet services on TV”, thereby enhancing the appeal of cable TV as a whole and expanding the audience.

3. Develop wired value-added services such as high-definition television. Cable TV companies around the world can provide high-definition television, interactive TV, 3D TV, and a variety of information services in addition to basic television services. Bidirectional HD meets the diversified needs of viewers and enhances the competitive advantage of cable network companies. It is the mainstream of future development. Jiangsu Cable Network Company launched the Ultra High Definition summer holiday in the summer of 2014. The movie, TV drama, comprehensive, daily exemption, Hollywood, Disney, sofa cinema, and Galaxy videos opened in the first period can be used for watching TV. The audience provided ultra-high-definition picture quality services and was deeply loved and appreciated by the audience. Jiangsu Cable also uses the "Left and Right Dual Video" video fusion transmission technology to allow TV viewers to connect 3D large-screen TVs through Jiangsu Cable HD set-top boxes and enjoy cinematic shock effects. In addition to developing value-added services related to film and television, wireline network companies can also develop innovative services such as TV banking and video games, further enrich service product categories, and meet the growing diversity and personalized service needs of users.

At present, China's cable TV listed companies are relatively monotonous and their ability to withstand operational risks is relatively weak. And some film and television companies usually use mergers and acquisitions and restructuring to improve the industrial chain and achieve diversification, or can be used by cable network companies for reference. On July 19, 2013, Huayi Brothers issued an announcement confirming its acquisition of a 50% stake in the mobile game developer Guangzhou Yinhan Technology. On September 2 of the same year, the Huayi Brothers announced that it plans to purchase Zhejiang Changsheng Film and Television for 252 million yuan. 70% of the company's shares. These two acquisitions strengthened Huayi TV drama production and mobile game business, and improved its ability to resist risks. On September 30, 2013, LeTV.com announced a reorganization plan. It plans to purchase 100% equity of Dongyang Huaer Film & TV Culture Co., Ltd. in a combination of cash and issuing shares to enhance its continued competitiveness in original works. A 99.5% stake in LeTV New Media Culture (Tianjin) Co., Ltd. was purchased as a share issue. LeTV will extend its reach to the upstream of the industry chain and achieve the integration of "platform + content + terminal + application" through mergers and acquisitions. Cable network companies can also try to expand commercial content such as films, variety shows, and music, and establish a complete industrial chain integrating content production, packaging, distribution, and broadcasting, and implement a diversification strategy.