Since November 2016, the music crisis in the supply chain of LeTV broke out, which led to the music chain rupture. As a result, negative music news and debt problems intensified.
In July 2017, the $ 1.377 billion assets of three music-loving companies, the couple of companies of LeTV and LeTV, the chairman of LeTV Group, were frozen in judicature, after which he resigned as the chairman of LeTV Group.
This led us to begin to pay attention to the existence of LeTV, the best quality music business in LeTV system. We hope to see if this LeTV business can grow steadily in the most prestigious business in the industry and finally lead LeTV out of the quagmire.
Unfortunately, however, based on recent feedback from relevant channels, the current LeTV has reached a critical point of birth and death, and as the brand declines overall, any one of its units is hard to beat.
Text / hot spring
"In the past two months, the sales of music and television have dropped dramatically." In mid-November, a person close to LeTV disclosed to Netease Technologies that online sales of LeTV have dropped to 1/10 to 1/5 of their original monthly sales volume. On the internet, the sales of LeTV Mall also slipped to less than 1/10 of the sales volume of Jingdong Lynx and other e-commerce channels, which has dropped by about half.
'This situation is really bad to no longer bad.' 'Another person who is very familiar with music and television to NetEase technology feeling.
The deterioration of this situation did not happen suddenly, but has lasted for a period of time.In November 2016, Le samsung mobile phone supply chain arrears crisis, affected by the crisis, LeTV sales also began to decline in 2017 Music as the shareholders at the General Assembly in June, when LeTV CEO Leung said the music from the first half of 2017 negative growth in music as a result.
However, since LeTV has always been regarded as the best asset of LeTV, all parties consider it unlikely to be too affected. After all, LeTV started its appearance as a 'subversive' in 2013 and has until now As of now, its sales volume has exceeded 10 million units (LeTV official number), ranking first in the emerging Internet TV brand.For the peak of LeTV sales in September 2016, the domestic market for each sold 5 units TV, there is a music TV super, this figure was among the TV brands in the entire industry, the first channel.
So now, as music television what happened?
Sales bottoming out!
LeTV sales are falling sharply across the channel.
LeTV sales of the sub-line and offline channels, online mainly in Jingdong, Lynx and LeTV's own music store sales, offline is mainly in LeTV's own offline store sales.A former music as a staff Tell Netease Technology that in 2016, the total sales volume of LeTV is about 30% of the online Jingdong Tmall, about 30% of the LeTV store, and about 40% of the offline LePar.
The ratio of the data was confirmed by a number of LeTV employees, but it was not officially confirmed by LeTV.
Net sales, Netease technology did not get the specific figures, but there is a publicly available list can make some evidence.According to the JD data released in 2016, the music sales in the best TV When to be able to row to Jingdong TV sales of the first or second, but in 2017 double eleven, LeTV sales have disappeared from the top 15 list.
Online, NetEase visited LePar's 10 stores in Haidian District, Beijing. After that, it visited four LePar stores in Chaoyang District and Tongzhou District, and contacted 5 LePar shoppers in second and third tier cities and small county towns .
All LePar shopkeepers have said to Netease Technology, now operating more bleak.
One of the shopkeepers told Netease Technologies that LeTV sold best in 2016. At a peak, the monthly flow of a shop can have 60-70 million yuan, and now it is only about 100,000, less than 1/3 of the original. LePar owner of the shop in the county town of central China told Netease Technology Co., Ltd. that in 2017, its dual-11 store only sold 5 TVs.
A source close to LeTV told NetEase technology figures show that in the first three quarters of 2017, LeTV sales were about 1/3 of the same period in 2016.
Third-party evidence comes from the monthly monthly release of Alvarion's Global TV Brand Shipment Monthly Report: Based on the monthly data of this report, LeTV's shipment volume is also gradually approaching the bottom.
Here need to explain, is not the volume of shipments, shipments refers to the number of TV channels from manufacturers to sales channels.It is the difference between the final sales of television and a 'stock', there may be TV to the sale Channels, backlog in the warehouse, did not sell it. Overall, the more TV sales, manufacturers produce more, from the manufacturers to the channel the number of TVs more. Conversely, the less. The trend with sales is generally consistent.
From this table, we can see that until April 2017 (including April), LeTV's shipments were still at 100,000 units, with 387,000 units shipped in April; however, In May, shipments dropped directly to 80000 units; and in August, it fell to 24000 units.
'This trend is very dangerous.' A veteran insider told Netease Technology, in the color TV industry, annual shipments of 1 million units is a threshold - to reach this number can be considered a certain scale of the manufacturers, less than the annual shipments of 100 Million units, the brand is very difficult to gain a foothold in the market.However, this figure is a rough estimate, not the exact figure.
The source to Netease Technology explained that this is because color TV production is a more complicated matter, the need to integrate the resources of all aspects of production, about 1 million units shipped each year to roughly protect the operation of an independent brand of funds up; shipments Too few words, the turnover is limited, the money earned may not be sufficient to support the operation of all aspects of production.
According to the current situation, if the music TV can only maintain the existing shipments, its shipments in 2018 is expected to be less than 1 million units.
Some shop owners claimed that during the peak season of November-December, the sales volume of music-TV increased slightly, but the increase was seasonal and small, which made it difficult to affect the overall situation.
On the decline in sales, Netease Technology has verified music TV official, but as of press time, yet to receive a reply.
Offline channels collapse
The sharp drop in TV sales brought a series of chain reactions.
The first is the large-scale closure of off-line LePar stores, which is a fatal blow for LeTV: LePar's loss of stores, and LeTV's loss of more than just the TV sales from the stores and the profitability of the future.
The birth of the LePar store started with the 'LePar Super Partner' program, which LeTV started in August 2014. The reason for opening the stores is that 70% -80% of China's color TV sales are offline and only 20% % -30%. At that time, online sales of good music TV, if you want to further expand the scale, we must go offline.
Not only is LePar a store under LeTV's online store, but also a cornerstone of LeTV's business model, as quality sales are off-line despite sales of about 40% of all LeTV sales through LePar stores.
A person close to music as told Netease Technologies, LeTV's business model is a hardware negative profit, the TV itself is not profitable, plans to make money by late-stage television advertising operations; to achieve this, we must vigorously develop the membership, because only have a large Of the video members, music as' watching while buying 'and other operating modes to really landing.Meanwhile, the sales of LeTV members rely mainly on the line.' We hope that two of the 10 online individuals to buy membership, but in fact 10 individuals Probably only 0.2 individuals to buy membership, but offline sales, due to the active sales promotion staff, with members. 'The person told Netease technology.
LeTV has been laying its sales channels since 2015, with official disclosures all the way up to 10,000 in 2016. However, according to Netease Technology, the number of LePar stores may have dropped below 2,000 at the moment, Once a threshold has been estimated, below this threshold, the music in the future may not be able to maintain the current market size and continue to shrink.
NetEase Technology saw many LePar stores are disappearing.
In August and September 2017, Netease visited all LePar stores in Haidian District of Beijing (10 in total) according to LePar's official website address and randomly visited 3 stores in Chaoyang District and 1 store in Tongzhou District Visiting the situation is not optimistic, only 14 of these 14 stores are still operating normally.
December 12, the situation has become even worse .In December 27th, Netease technology reporter found in the LePar official website, the entire Beijing LePar shop has only 16. And in August and September, LePar official website stores in Beijing Or divided into districts and counties show that a district there are more than a dozen or more.
Netease science and technology random interview with Beijing and Shandong two shopkeepers corroborated this situation, one of the original six LePar shop, in August has been closed to three; the other had four stores, by December when already Closed two.
This is not a local situation.Modest music and television close to NetEase technology confirmed that off-line LePar large area stores is already a fact.
He disclosed that LePar's online division and demolition of the area has shrunk from the original 16 major districts to 12 major districts, and that the 'big city' is not one of them. For example, Beijing originally belonged to the northern part of North China , Beijing is now a separate area.He also disclosed that the feedback from the person in charge of the district point of view, each district LePar shopkeepers are unable to get in, every day only to hear who is out, but not Newcomers join.
The area is also well-known. The source said, LePar shopkeepers are not willing to do the area manager, that is, the main grid, because the grid is not what the main benefits in the planning of music as the grid theory of the main two Benefits: The wholesale rights to the region's TV, the revenue from the region-wide TV operations (future TV commercials, etc.). "But now that the TV can not be sold, nothing else can be said, 'he said.
This situation has also been confirmed in an interview with Netease technology.LePar shopkeepers told Netease technology, did not feel too much benefit to do the main grid, but to pay a lot of deposit, but also to punish the goods, so we do network The main motivation is not high.
However, the specific number of LePar stores left now, the aforementioned music lover said that I am afraid that as there is no music as LePar shop closed, and will not immediately give any feedback to the music.Levar internal discovery LePar shop closed because Line sales only about the original 1 / 10-1 / 5, many stores are not in stock. 'Line LePar store exists in the sense that it can bring some retail sales, if you can not sell goods, stores It makes no sense. "He added.
If in accordance with the proportion of the decline in sales, the estimated remaining music music TV stores, it should be 10,000 1 / 10-1 / 5, that is, from 1000 to 2000. The above Netease technology to explain the threshold 2000 This is based on the numbers Sales of TVET needs to maintain and how many TVs each LePar store will sell to survive.
Let's look at the number of sales that LeTV needs to sustain, and the source said that LeTV sold a total of about 10 million units before it was switched on and 700-800 units were switched on frequently. The average life of a TV set is 3-5 years, It is estimated that about 10 million TVs will be eliminated from the market in about five years. Therefore, LeTV will need to sell at least 2 million TVs a year and continue to hold 10 million LeTV TVs in the market after five years.
Look at each LePar store how many TVs need to sell to survive.According to the person to Netease technology reporter said that a LePar store needs to sell about 500 TV sets each year to survive (this figure is the average, not the same precise number, In first-tier cities, selling 500 units may not be viable, but in a small county town, selling 500 units may be able to live well.) The source explained that this is based on a combination of the cost of a LePar store, profit estimates.
In view of the two channels of music and television online and offline, according to 50% of offline sales to count, the line needs to sell 1 million units per year, each LePar stores need to sell 500 units, selling 1 million units will need 2000 Home shop.
If the offline stores less than this value, the stock music TV may be declining.NewEasy cloud technology to get cloud data from January to October 2017 LeTV TV shipments totaled 2.21 million units, Even with an average of 142,000 units per month figures, the annual shipments will be 1.7 million units, less than 2 million units of the target value; not to mention, of these 1.21 million units in 83.67% in the first four in 2017 Month shipment.
This is a terrible decline.
About off-line store off the relevant circumstances, Netease Technology has verified music TV official, but as of press time, yet to receive a reply.
The price of goods across the country chaos
In addition to the already closed LePar store, the LePar store that still exists in order to sell the music TV, began each other goods journey.
This may make Music Television into a vicious circle.
According to Netease technology reporter learned that the country's LePar owner set up various groups, one of the functions of these groups is to mobilize each other sources: because some LePar owner stock, but can not find the buyer; some shop owners have buyers, However, there is no supply for a time.
This behavior, in the industry is called "serial goods." Under normal circumstances, in order to continue to develop, the general brand will resolutely put an end to such behavior, and this arbitrary arbitrage, price cuts to conduct severe penalties; Will lead to chaos in the price system of a brand, price war in its own brand, which makes the price of the brand soon bottomed out in the market, resulting in channel distributors because of the profit margin rather than consignment, thus forming a vicious circle. Tell Netease technology, the chaos of the price system is the taboo sales, LePar between the owner of the 'string goods' will lead to loss of music as the control of the channel operators; and on the consumer side, because of the different sales prices seen in various channels, Will also be questioned on the brand, which will further lead to lower sales.
However, for LePar, the nationwide stocking has become the way for shopkeepers to survive, and now many shop owners are hurrying to deliver goods and clearing the stock before they quit Constraints.
In addition to getting goods between the owner each other, there are some other channels to get the goods (LeTV TV). A LePar owner told NetEase Technology, Music many arrears are used to come to television, not on the money Also TV. He gave Netease technology reporter cited an example, such as music as a lot of advertising, but not on the advertising company's money, put the television to advertising companies, advertising companies need to find channels to cover the sale of television to offset the debt Go out, so as to recover the arrears; In order to try to ship, the general channel to the TV, the price will be lower, lePar owner get, the price will be reduced accordingly, but which still have the difference make.
One owner showed Netease chatting about LePar partner group, and even the owner would like to sell a TV at a loss of 2,000 yuan. 'Now it's time to ship quickly.' 'He said that his own TV program at LeTV, each priced at Lower than the Internet for several hundred dollars.
On the relevant goods Chuanhuo, Netease Technology has verified music TV official, but as of press time, yet to receive a reply.
Supply chain collective 噤 sound
Sales decline, the collapse of the channel, the biggest threat is to give the supply chain payment issue.If you can not repay the supply chain in time, it will threaten the production of music television, which may lead to further chain reaction.This point, the music as the phone Is a warning.
To be sure, as of April 2017, LeTV has five foundries: TPV, Foxconn, Yi Chang, TCL and Zhongqiang. In March 2017, LeTV organized several media visits to the largest generation of LeTV Factory - TPV Technology (Qingdao) Co., Ltd., which is now appointed Le Veritas intelligent terminal supply chain, Wang Dayong, senior vice president at the time to answer media questions disclosed.
But by August 2017, insiders told Netease Technology, LeTV television foundry has only AOC only.This information has not been directly verified and verified, can not be fully confirmed.However, from a series of media in 2017 Reported that the remaining four in three - Foxconn, Yi Chang, TCL really have their own situation.
In July 2017, according to the Beijing Business Daily, Foxconn-affiliated Shenzhen Guanting has withdrawn from the music-to-new shareholder sequence and since 2016, Shenzhen Guan Ding ceased to appear in the music new shareholders Among the list.
As of October 2017, LETZ owed Yichang a total consideration of RMB 440 million, and on Nov. 30, Yichang Co., Ltd. released an announcement on the reply from the Shenzhen Stock Exchange, disclosing the corresponding cooperation with LesTV:
Yi Chang shares and music as the sub-subsidiary of LeTV as the new cooperation since February 2016, the main product sales for the TV machine, the year 2016 the company realized a new sales of music 1.097 billion yuan; January 2017 ~ September 2017 The Company realized a total sales of 1.141 billion yuan from LeTV Zhixin. As of the end of September 2017, the Company had a total of 556 million yuan of receivables from LeTV; in October, LeTV Zhixin paid a total of approximately RMB 116 million to the Company.
Yi-chang shares said the company executives and music to the new top level to maintain close communication, and initially reached a follow-up payment plan.Since 2017, the negative news of the music system constantly, music video performance decline, capital chain tension, lead to new music Due to the overdue payment of the Company, the Company expects the recovery of some overdue receivables with uncertainties and risks of bad debts.
TCL, the new core partners from the list disappeared.According to media reports, November 24, 2017, the new music as the first core partners to close the door to participate in the closed-door partners, all Core suppliers from the global smart TV industry supply chain, including Chairman of Candeo, Lin Huizi, general manager of Zhongqiang Optoelectronics, Xiong Haitao, chairman of Yi Chang Technology and Gaojin Group, Ding Jinduo, vice chairman and general manager of Yi Chang, Foxconn Consumer Electronics President of Product Group Qiu Chongyi, TPV China TV Business General Manager Ye Guoyuan, Ben Chen Electronics Chairman Chen Shuncheng, Jin Ruixian Chairman Fang Jiangtao, Morningstar Semiconductor Chief Operating Officer, Morningstar Semiconductor General Manager Lin Yongyu, Liu Zhixiong, core wisdom Tian Weidong - no TCL representatives in this list.
In addition to YiChang, which has been announced, Netease tried to contact all the companies in the list, among which CanYu, JinRuiXian and Wisdom finally failed to contact, while the other companies all rejected the interview even half a year ago AOC welcomed the media also welcomed the interview inconvenient interview.
Netease technology has also been linked to when any as the smart terminal supply chain senior vice president Wang Dayong, the other also rejected the interview.
In early 2017, LeTV announced a new sales target of 7 million units and 8 million units in 2017. In an interview with AOC in March, Wang said: "In order to reach the target of 8 million units, The need to properly expand production capacity in the future music up to the new will not rule out the introduction of more partners to cooperate in the field of large size.According to the music program, large-screen TV will be the focus of the next step 414 period, the total super TV inventory 75 However, according to media reports, the actual situation is that in 2017, the sales volume of music and television decreased by 30% year-on-year to about 384,000 units in 2017, and then In May, Wang Dayong left.
Even TPV, which is still sticking to the current situation, the actual cooperation with the music as the situation is not very sure.In March 2017, the face of the media TPV quite optimistic that the TPV plant in Qingdao, the supply of music from 2017 Since the rise in the state, music as the payment method is to take a monthly basis, 60 days of payment, there is no arrears yet However, NetEase technology in a legal forum found TPV factory workers complained that music arrears led to performance awards Not out of the post, posting time is June 4, 2016. The authenticity of this post Netease technology still can not verify.
At the same time, music as if you want to replace the foundry, not an easy thing.Industry insiders told Netease technology, if the big foundry exit, a small foundry even more afraid to do: the uneven level of the foundry, large Foundry can give the account (that is, you can post-production payments), a lot of small factories are cash to do.
On the supply chain cooperation, music and television are also temporarily not respond to Netease technology.
Speed of life and death
At present, the music and television's life and death, the core logic is - sales, products, supply chain of these three can form a virtuous circle.Products more sales, more profits, there is no problem in supply chain repayments, suppliers Willing to produce more profits can improve the product, the scale can continue to expand.On the contrary, if the product can not be sold out, there is no capital to enter, it will form a vicious circle.
Speed is very important if you want to get out of this crisis.
After tossing for more than a year, LeTV is now facing a completely new market environment - the traditional advantages of LeTV are being lost, and competitors are moving forward with increasingly strong forces. LeTV's own team is not stable.
At the time of LeTV just reaching the TV market in 2013, the Chinese TV market was still dominated by the five traditional vendors (Hisense, Skyworth, TCL, Sharp, Samsung), which opened up the market with rich content and low prices.
Now go to the appliance store can be found in a circle, the TV has basically become a look - all the TV has its own system, are free to install APP, rich content and low price of these two advantages, At LeTV TV all lose ground.
The copyright gained by LeTV has been gradually deteriorating since the early years as a distributor of copyright distribution and a large amount of genuine film and television drama at a very low price. In 2012, it has more than 50,000 TV dramas and over 4,000 films, About 70% of the popular movie, the exclusive online copyright TV series, but the music in the ensuing years, focus on 'painting cakes', depending on the music as the ecology, missed the golden age of video content competition.Several time hit' people's Nomination "and" My First Half "TV series can be seen on almost all video websites such as Tencent Video, Ikki, Youku Tudou, Sohu Video, PPTV, and Mango TV, but they can not be seen on the Internet.
Similarly, cheap is burned by large sums of money, and music television is the lack of money.
According to media reports, sales of Xiaomi increased 253.9% in the first three quarters, sales of Storm TV in the first three quarters were up as compared with the same period last year An increase of 30%, revenue growth of 82%, while from the beginning of September 2017, the storm has been behind the music as the sales for several months over LeTV, and the gap is growing.More serious is the loss of talent, according to NetEase technology interviewed understand that many employees left from the LeTV business lines went to Xiaomi or other competitors.
At the same time, LePar shopkeepers are also looking around.If you want to quit the music system, to join the new brand, as shop owners are currently under consideration.However, to choose the next to join the brand is not easy - the traditional channels have been There are molding system, it is difficult to insert; emerging channels, the product is good, the return to the channel is not high, are issues to consider .This choice, it will take some time.However, the wave of new retail has swept This is only a matter of time.
In 2018, maybe everything will be the answer.
Bottoming out the opportunity to rebound
However, music television is still a chance of rebound.
The new music as the intellectual home is music LeTV as the 'backward operation' is such an opportunity.At December 26, 2017 conference, LeTV Super TV Marketing Leader Lee said the big screen new shopping 2018 sales forecast A breakthrough of 350 million yuan.He also mentioned that in the future platform for the ability to music, music and television as there are many children's games and many other scene services.
The 'back-to-back operation' can indeed generate a certain amount of income for the new music-viewing intellectuals, and the former music executives who have now resigned are also very confident that he even optimistically predicts that after three years, the back-to- 20-30 billion yuan of cash flow, which includes music TV open screen ads, insert ads, membership income, big-screen shopping, games and so on.
He further explained that the music TV sub-new models, the old models (the first and second generation) small size, the new model size. Larger models, the longer the life cycle, because the cost of renewal machine High, the user will be willing to extend the use of time, so the revenue is also high after the operation.According to previous estimates, the annual revenue per model of old machines about 200-300 yuan, new models annual revenue of about 300-400 yuan each 20- The estimated revenue of 3 billion yuan is estimated from this.
However, his optimism still has some reservations. 'Backward operation' was not particularly good on the ground before, the future can be successfully obtained income and suspense.
Outside of this 'backwards-run' path, new capital injection can give LeTV more time and space for transformation.
In the evening of January 2, LeTV released a notice that the new music as a smart home to be in accordance with the estimated 12 billion yuan financing of financing 3 billion yuan, which is no doubt for the TV music, is a life-saving money.
If you do the worst plan - Music as Television has been unable to complete self-help by its own strength, its own value is actually recognized by the industry, still can rely on the sale for more long-term development. In my opinion, the biggest value of LeTV TV has two points: one is the tens of millions of entrances - tens of millions of TVs have been sold and can be operated in the future; the other is the brand, despite its brand image Decline, but the popularity is beyond a lot of normal television, and due to the large number of previous business, there are brands exposed in many areas, such as music, education, children and so on.
If Music TV is acquired, that is another story.