Six months after becoming a wholly-owned subsidiary of Alibaba, Ali Digital Entertainment and Youku, both members of the Alibaba Group, completed the integration of channels and content. Now their ambition is to become “the first content ecology of family Chinese entertainment in the Chinese-speaking Chinese regionâ€. Alibaba Digital Entertainment intends to become a provider of home entertainment ecosystem applications, relying on Alibaba's vast ecosystem to become the master of the right to speak in the home entertainment market.
At the "Unbounded, See Future - Alibaba Family Entertainment Strategy Conference" held on October 12, Alibaba Digital Entertainment released a corresponding strategy for content, applications, and products in the direction of home entertainment. Content, while enriching the content library, will also provide more Yuan video services such as 4K channels. In terms of applications, Alibaba Digital Entertainment demonstrated a new movie and TV desktop and YunOS system. In terms of products, Alibaba Digital Entertainment will continue to promote Internet TV box business while also working more closely with traditional TV manufacturers.
Open up channels and content
"We have shouldered one of our most important missions: In the shortest possible time, we will inject all the content and capabilities of Youku into Ali's entertainment." Li Jie said that Ali has spent a lot of energy in the past few years to build his own. Large-screen channels, however, face great challenges in terms of content. Alibaba Digital does not have its own content, and "in the pan-entertainment industry, channels and content are the two most important."
In April 2016, Alibaba completed a wholly-owned acquisition of Youku. Youku, which has been assigned to the Ali Cultural Entertainment Group, began to integrate with Alibaba to control the number of family entertainment Alibaba.com channels, through the connection with Youku. Make up for their own shortcomings in terms of content.
“Youku’s ability in OTT and large screens is fully integrated with several entertainment resources. This includes team integration, business integration, content integration, and data integration. Starting today, Ali is entertaining Alibaba entertainment segment is clearly positioned as a content distribution channel for home entertainment. Content procurement, self-control and co-production will be completed at Youku, and content distribution and realisation at the big screen will be digital entertainment in Ali, Li Jie said.
At the same time, Youku’s original large-screen business has also been integrated into Alibaba’s home entertainment business. “Big Screen†and “Distribution†have become two keywords of this strategy. With Youku as its core, Alibaba cooperated with Huada and CIBN licensees to establish a matrix of terminal products, namely the future Smart TV Cooperative Alliance, several entertainment set-top box alliances, and Tianma Box, cooperating with China, and CIBN. Cool Po, Little Youku (APP), Youku VR (App) and CIBN Universal Film & TV.
In the introduction of Yang Weidong, Alibaba Digital Entertainment and Youku will collaborate in five areas: brand, content, data, membership, and commerce: Youku's content will cover Alibaba Digital's large-screen copyrights; members will be associated with each other, the entire big screen or OTT members will automatically become Youku Gold members; the opening of user data will bring more user-friendly and personalized content experience to the users; and various realization channels such as advertising, membership, e-commerce, and games will be established.
Under a series of synergistic effects, Alibaba will form a unified home entertainment brand. “Maybe at the right time, Ali number entertainment will be renamed Ali family entertainment.†Li Jie said. The brand will serve young people who are familiar with Internet applications who are beginning to fully enter the family life and meet their needs for a two-way, integrated application experience in the living room.
In the statistics of AVC Ove Cloud Network, by 2020, the overall market size of China's living room economy (including hardware) will reach 630 billion yuan. It is estimated that by 2018, the number of global Internet TV devices will reach 760 million units. As of now, Alibaba has 20 million active operating users for home entertainment days, and Alibaba hopes this figure will reach 60 million three years later.
Differentiated competition of boxes
In order to gain an advantage in the home entertainment market, Alibaba Entertainment has adopted two different layout strategies for Internet TV boxes and Internet TV. In terms of Internet TV boxes, Alibaba Digital Entertainment adopted a differentiated competitive strategy and launched an Internet TV box specifically designed for children to conduct differentiated competition.
"The box itself is based on cooperation. In Alibaba's entertainment home entertainment terminal, the cooperation box is far more than the box we made ourselves." Li Jie believes that Alibaba's own box is more like entertainment. Google’s Nexus Player is mainly aimed at providing a standard in the OTT box field. “I’ve done this before I can cooperate with other vendors. So in the box market, we probably make 1/3 of the boxes we make ourselves. The box we work with others is probably about 2/3."
The current market share of Tmall Box is 32%. Coupled with several Internet TV boxes in cooperation with Ali in the STB Alliance, Alibaba Digital Entertainment has actually completed a staking in the Internet TV box industry. According to Li Jie, the overall growth rate of Internet TV is now maintained at single digits. Grasping the group of children and subdividing the market is a new growth path for the Internet TV box market where Alibaba Digital Entertainment has grown relatively slowly.
In Li Jie’s introduction, children’s content will be one of Alibaba’s advantages in family entertainment. “Because children have the feeling of a family, two young people will each get a mobile phone and share it at home. When it comes to content, it is often when you are with your children." Moreover, compared to adults, children's content is more likely to achieve business transformation, whether it is content payment or derivative development.
For the traditional TV "enable"
In the emerging field of Internet television, the overall pattern of the entire industry has not yet been finalized. Alibaba Digital Entertainment has adopted the method previously adopted on Internet TV boxes, established the future Smart TV Cooperation Alliance, and launched the "TV Eco Inside Project." The goal is to make the world not difficult to do smart TV, for the traditional TV "enable".
“We are essentially an internet company. We are pursuing DAU. We are not pursuing shipments, so we are not really a hardware company.†Li Jie said, “TV is a very mature consumer electronic product. In this product, we believe that Ali does not have an absolute advantage. Actually, Ali's role is more of an application system and ecological provider."
Currently, partners who have joined Alibaba's entertainment "TV Eco Inside Project" include Haier, Konka, Changhong, Hisense, Skyworth, Sharp, Philips, and Microwhale. At the conference, Alibaba Digital Entertainment displayed six new Smart TV products developed in cooperation with Haier, Konka, Changhong, Sharp, Philips, and Micro Whale. In the future, Alibaba Entertainment will focus on content, smart upgrade, and integrated marketing to help traditional TV manufacturers embrace the Internet.
“We provide TV manufacturers with everything from OS to desktop, to content, to payment accounts, to e-commerce, to the entire content of the application game. TV manufacturers decide because different TV manufacturers have different strategies and priorities. Some TV manufacturers will choose to use all of Ali's application systems, and some TV manufacturers may use desktops or only content. We will use different business forms to determine different benefits."
Li Jie also said to Sansheng that “Youku content is getting stronger and stronger. In the future, Youku’s content will only be provided to our partners in the future Smart TV Alliance, and will no longer be provided to television manufacturers outside the alliance. It's our ability to collaborate on the platform. Whether you want to get Youku's paid content or free content, you must join in. You don't need to meet the requirements to join this alliance."
At the same time, Alibaba Entertainment will not support multiple content aggregation on the same TV. For TVs adopting Youku content, Alibaba Digital Entertainment will require the other party to stop using the contents of other homes on this TV. Therefore, Xiaomi TV has previously claimed that the content of Youku, iQiyi, and Tencent will be aggregated on the TV system. The situation will no longer appear. "First of all, the General Administration of Commerce is also not allowed (more than one aggregation, multiple licenses). In addition, if we spend so much copyright fees, only when your CP, I think it is not respected us commercially."
“We will definitely do it if we invest, but we will not be controlling and we will not have our own TV factory. We will not be producing our own independent TV brand, but we may have a joint brand, just like a custom machine. Ali does not do TV The definition does not mean that Ali does not invest in this market, nor does it mean that Ali will not produce a TV with his own brand. Instead, Ali does not like Xiaomi and LeTV to create a TV brand and does not cooperate with other manufacturers. â€
“This era is not an era when anyone can do television. I believe this is a long-distance running. My partners will certainly win and the opening will surely overcome the closure.†Li Jie believes that the development of the mobile phone industry is changing. It may repeat itself in the Internet TV industry. By then, Alibaba Digital Entertainment, which provides application systems for traditional TV manufacturers, will have the right to speak at the bottom of the industry.