In
December 2016, the global blockbuster war drama Hacksaw Ridge was released to the Chinese mainland. The movie was
soon available on various digital TV platforms, allowing Chinese consumers to
watch this most popular movie at home. In addition to movies, digital TV
platforms provide gaming, shopping, and a great variety of other services. As
the "living room" economy booms, TV is transforming from a one-way
medium to a hotspot for two-way communications, interactivity, and multimedia.
Large-screen
TV has become the gateway to the "living room" economy, and
entertainment video services are thriving
Rapid
advances in Internet technology have intensified the competition for home
entertainment, introducing significant changes to the video industry. Digital
TV, smart TV, and IPTV, as the major large-screen home devices, are playing an
indispensable role in people's lives. As the number and level of engagement of TV
service subscribers continue to increase, video content, applications, and
value-added services on TV represent huge potential for profits. A "living
room" economy ecosystem revolving around TV is taking shape.
According to market
research firm Analysys, by 2018 the Chinese "living room" economy,
with large-screen TVs as the pillar, is expected to reach CNY230 billion.
Telecom operators have also quickly expanded into the household market with
IPTV. By virtue of the triple play service bundles (comprising
telecommunications network, radio and television transmission network, and
Internet services), the major three Chinese operators had attracted 867.3
million IPTV subscribers by the end of 2016, with the annual growth rate
exceeding 35%.
Video services for communications will be another
opportunity for the "living room" economy
Most consumers view TV as a medium to present
traditional programming and entertainment videos. TV has failed to play the key
role of enabling interactions between family members. With the rapid growth and
availability of mobile Internet, consumers expect their needs to be satisfied
without ever stepping out of their front door. They want their TV to become a
family interaction center that supports a wide range of functionality,
including one-on-one coaching, medical advice, and shopping. In the new Blue
Ocean of the "living room" economy, people have a strong demand for
all TV services, including gaming, music, entertainment, education, fitness,
healthcare, and customer service, to be bundled with video communication
service. This demand has created a larger market space.
Operators build "Video+ living room lifestyle"
Over
the past several years, global telecom operators have made video more of a
strategic focus than ever before. Video services are at the
core of household services, and they are the basis for the "living
room" economy. A combination of video communications with traditional
industries will not only deliver high-quality lifestyles to domestic consumers,
but also help to upgrade information consumption. This will ultimately make
"Video+ living room lifestyle" a reality. IPTV has enabled interaction between
media content providers and consumers, and TV video calling has brought family
members closer together. The two services have laid an important foundation for
building the "Video+ living room lifestyle" and achieving strategic
transformation.
In the future, operators will expand their video
capabilities in the communications field to every walk of life. The future will
see large-screen TV act as the key medium, supported by home broadband and
real-time audio. Operators will develop traditional one-way video webcasts and
on-demand services into value-added applications through partnerships across
multiple fields. As this happens, living rooms will adapt to consumer needs by becoming
cinemas, distance learning classrooms, fitness centers, gaming centers, and
shopping malls. Operators strive to build a new economic trend characterized by
"Video+", thereby increasing user loyalty, reducing user attrition,
and ultimately achieving sustained revenue growth.
For example, in 2015 China Telecom Sichuan launched their
"Missing Home" application. With cameras installed on interactive TV
(ITV) set-top boxes, this application allows users to have HD video calls
between TVs, and between TVs and smartphones. Originally, China Telecom Sichuan
offered Missing Home services to enable video calls between family members,
relatives, or friends. Users could be from any walk of life, and included
businesspeople, laborers, and students. Later, the company expanded the
application of Missing Home services to other fields, such as the primary
selection of "super girls" in the Super Girl Singing Contest Promo
organized by China's Hunan TV, Chinese eGovernment initiatives, and family
doctor based medical care. To date, Missing Home video call services have more
than 5.3 million subscribers. This is a huge success for China Telecom Sichuan.
1. Video for communications + education
With the rapid growth of mobile Internet, online payment
for small amounts has been quickly adopted and popularized amongst consumers.
Consumers are gradually becoming more receptive to online education. Parents
and students are the two groups who are most interested in education, and up to
24% of them are willing to pay for educational apps. It is estimated that the
online education market in China will hit CNY198 billion by 2017.
For example, on an online education platform, a
teacher called Wang Yu holds physics classes and charges just 9 Chinese yuan
for each class. However, he had 2,617 students enroll in his class and he
earned 18,842 yuan in a single hour after the 20% commission for the online
education platform.
As
an alternative device for online education, TV has become more popular amongst
consumers. Approximately 20% of those attending online education courses do so
via TV. Evolving video technologies,
including real-time HD video based on large-screen TV, group calls, whiteboard
video, and video filming provide strong impetus for innovation in Internet
education. This innovation will maximize the utilization of high-grade
educational resources and benefit both students and teachers.
2.
Video for communication + healthcare
The
Chinese government is developing more robust medical and healthcare systems and
increasing their capacity. The aim is to offer the public easier access to more
affordable medical services. Family doctor consultations and remote diagnosis
services offered through large-screen TV have rapidly been accepted by the
healthcare market and households.
On
December 28, 2016, Sichuan University inaugurated its West China Women and
Children Online Hospital. With the online hospital, patients can receive
diagnosis services at home, and doctors are able to issue electronic
subscriptions. Pharmaceuticals can also be directly delivered to patients.
In addition to education and medical treatment,
social networking, shopping, entertainment, and other services are quickly
becoming integrated into video, and they are becoming increasingly popular
among households. TVs have now become an important gateway to the "living
room" economy.
Huawei and telecom operators are working together
in the field of home video. With Huawei's help, operators are opening up the
video capabilities of their networks, and providing multi-screen, interactive
video connections through fixed-mobile converged networks. They are positioning
themselves as the gateway to the living room, and bringing in industry
applications to bolster the video ecosystem. Partners' innovative services will
enable operators to deliver unique experiences. As user demand increases, the
"living room" economy will become the next opportunity for rapid
industry growth. Operators who own the living room will win the future.
The era of the "living room" economy is
here! Are you ready?
