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A key turning point in the Internet TV and TV industry?
Television, one of the most transformative inventions of the 20th century, has become a powerful symbol of globalization and modern communication. The United Nations officially recognizes November 21 as "World Television Day," highlighting its cultural and social significance. Today’s television is far more than just a device for watching videos—it has evolved into a comprehensive entertainment hub. With the integration of the internet, TV has undergone a major transformation, reshaping the market landscape and introducing new challenges and opportunities to the industry.
This shift aligns with the times, as traditional television faces increasing competition from digital platforms. Recent media reports suggest that some second- and third-tier TV stations have experienced "zero audience ratings." While the accuracy of these claims is still under investigation, it's undeniable that many TV stations are struggling. For example, in the first half of 2017, TV advertising revenue dropped by about 4%, and over 80% of TV ratings fell by more than 10%. More than two-thirds of those had ratings below 0.5%, signaling a clear decline in viewership.
The challenges faced by traditional TV stations reflect broader issues in the industry as it adapts to the rise of new media and the internet. Smart TVs and Internet TVs have significantly impacted the market, pushing traditional TV out of the spotlight. In 2011, traditional TVs made up nearly 90% of total sales, but by early 2017, their share had plummeted to just 13%. In the U.S., Internet TV users now outnumber traditional cable TV subscribers, showing how quickly the landscape is changing.
Internet TV, which runs on smart devices, has become one of the most significant changes in the television industry. Open-platform smart TVs are now the standard, enabling greater flexibility and user control. As smart TVs become more widespread, they lay the foundation for the growth of Internet TV. Unlike traditional TVs, which lack interactive features, smart TVs allow users to choose content freely, bringing the habits of online browsing back to the living room.
According to recent data, there are now 20 Internet TV brands in the market, matching the number of traditional TV brands. Internet TV uses broadband networks and integrates internet, multimedia, and communication technologies to offer interactive services. Its unique user experience has made it highly popular among consumers.
Who are the main users of Internet TV? Surveys show that young people and the elderly are the primary users at home, with young people making the majority of purchase decisions—67.2% of all buyers. This makes them key targets for marketing efforts. Users don’t necessarily care much about content variety, but they place a high value on brand reputation and overall user experience.
In terms of viewing habits, Internet TV users tend to watch similar content, mainly domestic and international films and TV series. Interestingly, nearly 80% of regular TV users plan to switch to Internet TV, and over 90% of those using traditional TVs and set-top boxes are considering the transition. It seems that Internet TV may soon replace set-top boxes as the preferred way to access online content.
Despite its rapid growth, the Internet TV industry is facing challenges. After a period of explosive expansion between 2013 and 2015, the sector entered a turning point. With the end of the low-price phase and some brand crises, the industry is now under closer scrutiny. Issues like product homogeneity, immature profitability, and high competition remain concerns. Additionally, rising panel prices and slower-than-expected user growth are putting pressure on Internet companies involved in this space.
Meanwhile, the traditional TV industry, with its established supply chain, continues to evolve. The convergence of Internet TV and traditional TV, along with complementary strengths in content, service, and hardware, could be the future direction of the industry. As both sectors adapt and innovate, the television landscape will continue to change, shaping how we consume media in the digital age.