Television maker TCL Multimedia looks towards online entertainment for future growth
Chinese TV maker TCL Multimedia is expanding its smart TV content in a partnership with video-streaming heavyweight LeTV as it seeks to boost internet income.
Revenue from internet-based businesses are a new growth driver for the company boosted mainly by advertising revenue on the back of smart TV content, said Wang Yi, chief financial officer of TCL Multimedia.
The company wants to grow its internet business revenue to 100 million yuan (HK$120 million) this year, from 43 million yuan last year, Wang said in Beijing on Wednesday.
“We are confident to even surpass the target as both TCL and LeTV have a strong base of smart TV users,” he said.
At present the company derives the majority of its revenue from TV sales, but it hopes to boost the contribution from internet and other businesses to 50 per cent of annual revenue in the next five years, Wang said.
LeTV in December paid HK$2.27 billion for a 20 per cent stake in TCL Multimedia, making it the second-largest shareholder. In a partnership between the two companies, LeTV is sharing 5,000 movies and 100,000 television dramas with TCL’s smart TV users.
LeTV’s smart TV users can also install GoLive, an online cinema platform owned by TCL Corp, the Chinese TV maker’s controlling shareholder. GoLive is a home theatre application allows users to watch current-release films in real time.
“Sharing content between the two is expected to bring advertising revenue of 50 million yuan from TV start-up and shutdown ads this year, moving a step toward the transition to the internet,” Wang said.
The Chinese TV maker will also produce 1.2 million sets of smart TV for LeTV and supply 500,000 sets of panels in this year under the partnership.
Liang Tiehang, vice president of TCL Multimedia, said smart TV content would continue to expand.
“We are in discussion to bring LeTV’s sports content to our smart TV in the next stage,” Liang said in the same interview.
LeTV’s sports unit has secured the local exclusive broadcasting rights of English Premier League in Hong Kong and also the internet broadcasting rights of Chinese Super League.
Also, GoLive’s content will expand to include South Korean and Japanese movies to the platform, Liang said.
“The demand for home theatre is huge in second to third tier cities as there are not enough cinemas in those lower tier cities,” he said.
LeTV will also provide no less than 50 on-show movies to the GoLive platform.
Liang is looking to advertising revenue, expecting advertisers will place ads on smart TV.
“China’s TV advertising revenue reached 150 billion yuan last year with traditional TV ads dominating the market, but we expect a significant switch in the next few years as the number of smart TV users is growing rapidly,” Liang said.
TCL currently has more than 13 million smart TV users, and LeTV has more than 5 million super TV users. The number of households using smart TV are forecast to reach 300 million in three years, Liang said.