Color TV companies miscalculate Internet strategies have cash flow tensions

The desire of domestic color TV companies to make a turn for the better by making a turn for the Internet TV seems to have been lost. Since the investment in Internet TV has not yet received satisfactory returns, companies are currently experiencing tight funding.

Collective cash flow tension

Tongfang’s shares have announced that they will issue 800 million yuan in short-term financing bills. This is only a week away from its release of the semi-annual report. The performance of Tongfang’s shares in the first half of the year was not good-looking. The main business revenue was 6.4 billion yuan, and the net profit was 133 million yuan, a significant decrease of 24.1% year-on-year. The reporter failed to confirm the specific use of the 800 million yuan, but the industry generally believes that the first half of the money is not much, the same side "hand on" certainly not affluent, financing is to ease the cash flow tensions. The company’s mid-year report showed that the cash flow generated by Tongfang’s share operating business in the first half of this year was RMB –6.3 billion, compared with RMB –200 million in the same period of last year.

And TCL is also the same lack of money. Recently, TCL Multimedia signed a credit financing agreement with Bank of China and Standard Chartered Bank. Through this agreement, TCL will receive a four-year term loan of up to US$120 million. In addition, Changhong’s cash flow for the first half of this year was RMB-1.47 billion, which was even more intense compared with RMB-248 million last year. Konka’s figure for the first half of this year was RMB – 1.96 million, compared with RMB 90 million in the first half of last year.

Crazy betting on Internet TV

It is not difficult to find that these companies that are short of money are relatively aggressive companies in Internet TV strategy.

In the first half of the year, the intention of Tsinghua Tongfang, the "new generation" brand of color TV sets, to become popular through Internet TV was very clear. As early as the beginning of this year, Tongfang had reached strategic cooperation with CCTV, a subsidiary of CCTV. TCL was the first domestic company to put forward the concept of “Internet TV”. In early 2009, TCL took the lead in discontinuing non-Internet TV and put a lot of advertisements for Internet TV on subway advertisements and all kinds of media. At the time, TCL declared to the media that "Internet functionality will gradually become a standard feature of flat-panel TV products."

Skyworth, Konka, and Changhong also quickly followed up and suspended production of large-sized non-Internet TV. Skyworth also invested heavily in cooperation with Thunder to build its own content platform, and launched a wide range of network features such as movie on demand and chat. At that time, the madness of corporate investment and the madness caused many people in the industry to lament the "coming of the Internet TV era."

Appliance analyst Liu Buying told reporters that domestic companies are not surprised at the rapid development of Internet TV, domestic companies do not have much right to speak on television core technology, so I hope to create a new concept in a multinational giant with Samsung, Sony, etc. Take a turn in the confrontation.

Internet strategy is not completely hopeless

However, why companies collectively miscalculate Internet TV strategies? The industry generally believes there are two reasons. The first is the regulatory issue. Since the Internet TV was launched, it has become incomprehensible in the fight between the broadcasting and broadcasting industries and the two major departments of the Ministry of Industry and Information Technology. In August last year, the General Administration of Radio, Film and Television stopped Internet TV, and the Chinese Electronic Video Industry Association eventually got loose on behalf of the company.

However, this is only the beginning. In April of this year, SARFT issued two normative documents requiring manufacturers to implant a platform for integrated licensees for Internet TV content terminals. The original household appliance manufacturers invested heavily in Internet TV content platforms. This put it down. The content operating license has not yet been issued, the development of Internet TV has to stop.

In addition, Internet television content does not meet consumer expectations and low cost performance is another reason why it cannot be recognized by consumers. Liu Buchen believes that Internet TV has limited network functions and is not very different from regular TV. The name is not the main reason why it cannot be profitable for manufacturers.

Recently, TCL Group Chairman Li Dongsheng frankly told the media that one of the important reasons for the loss of the color TV business in the first half of the year was an error in product planning, and he devoted more energy to Internet TV, and was seen as a trend in LED TVs. "Go slow."

However, corporate investment in Internet TV will not be "white throw." According to Jin Xiaofeng, deputy general manager of Ovid Consulting, “It is not as pessimistic as it seems. It is normal for companies to receive revenue during the market cultivation period.” He said that under the background of triple play, the development of Internet TV is definitely a general trend. The new content profit model is the focus of the company.