Publisher:Scan
Fifteen years ago, I began to pay attention to the cable network sector, witnessing its rise to prominence and subsequent decline. As the saying goes, the future is bright, but the road is incredibly winding. If it weren't for the rapid development of the internet and the significant liberation of user demands, one could argue that the cable network has indeed made progress over the years, even if it were to boast about it behind closed doors. However, when looking at the entire media landscape, these advancements in cable networks are quite unsatisfactory, especially in recent years, which can be described as stagnant and struggling to move forward.
In the early years, I mentioned that cable networks possess three inherent advantages in industry competition, which form the core competitiveness of cable networks. However, with the rapid changes in the media environment, the three traditional core advantages of cable networks are gradually disappearing.
The first advantage to disappear is the resource advantage. In the past, when it came to competing with communication networks, the broadcasting network would wield the magic weapon of bandwidth resources, coupled with a one-to-many transmission model, giving it the edge as the best channel for video transmission. However, with the continuous investment in network infrastructure by the telecommunications industry, fiber-to-the-home has gradually become mainstream. Especially after "Broadband China" became a national strategy, it is expected that by the end of 2015, urban households will have bandwidth exceeding 20 Mbps, rural households will exceed 4 Mbps, and households in provincial capital cities in developed eastern regions will reach 100 Mbps. Such bandwidth is sufficient to support the smooth operation of various services in OTT and IPTV. At this point, the bandwidth advantage of cable networks will be completely gone. Even the telecommunications networks, under the impact of the platformization brought by the internet, are worrying about becoming mere pipelines for the internet, let alone the broadcasting networks that are facing replacement by telecommunications networks.
The second aspect to disappear is the service advantage. In the past, cable networks held a monopoly in the television transmission field, with television signals relying solely on cable. At the same time, cable networks transitioned to a comprehensive information platform for households through digitization, further solidifying their service advantage. However, in recent years, cable networks have been left far behind by the internet. Whether it is exploring user needs, developing new businesses and products, or understanding user experience, cable networks have been relatively slow to respond, while the internet has been making rapid strides and continuous updates. Now, they have even developed smart terminals, launching a major offensive in the living room, quickly seizing the stronghold of cable networks with little resistance.
The third advantage to disappear is scale. Compared to communication terminals and internet terminals, televisions are undoubtedly the earliest popularized home appliances, which also means a vast user base for cable networks. However, by the end of 2014, although the number of cable TV users in the country had reached 230 million, the growth trend indicated that it had actually hit the ceiling for user growth. With the saturation of the existing user market, the user growth rate for cable networks has been in a downward trend for several consecutive years, with the annual growth rate dropping from 8.86% in 2007 to 6.14% in 2012 and 6.44% in 2013. Correspondingly, the revenue growth rate for the cable industry has also slowed, with the annual revenue growth rate falling from 21.95% in 2007 to 14.21% in 2013. Currently, although cable networks have been approved to enter the broadband access market, hoping to compete with telecommunications operators, the former has an existing broadband user base of 10 million, while the latter has 200 million, clearly highlighting the disparity in user scale. Against the backdrop of the integration of the three networks, the scale advantage of cable networks will also vanish.
Why does a cable network, which has inherent advantages such as a bandwidth of up to 550MHz and 760MHz, strong entry barriers, excellent transmission capabilities for video signals, and various government protection policies, perform so poorly? The author believes there are several serious issues that have led to the cable network being at a disadvantage in the fierce competition of the convergence era.
First and foremost, there is the long-criticized issue of the system. Under the protection of a monopolistic position in the regional market and following the inertia of public institutions, many cable networks have become accustomed to being content with small profits. They lack both the motivation to engage in market operations and the preparedness to face market competition. When encountering difficulties, their first thought is to seek policy protection and utilize administrative means, rather than participating in industrial operations as a business entity.
Under this non-market-oriented mindset, the specific manifestation at the operator level is a serious bureaucratic approach characterized by administrative methods. The organization is filled with outsiders who lack both technical expertise and professionalism, showing a lack of insight and follow-up on scientific development trends. There is also a deficiency in responding to and operating within the market, resulting in a development speed and response strategy that are always half a step behind, leaving them far behind the pace of the times.
Looking deeper into these issues, it becomes clear that the fundamental problem lies in the lack of a clear strategic vision among decision-makers regarding the essential attributes, positioning, and development direction of cable networks. Over the past decade of digital transformation, operators of cable networks have struggled to catch up and explore new avenues, gradually accumulating valuable experience and forming a clear strategic direction. The NGB development strategy is a typical example. I once wrote enthusiastically about the arrival of the "media and communication industry." Unfortunately, the useful experiences and clear strategic ideas have not been implemented or sustained; instead, the maximization of industrial interests has been replaced by the highest positions in the bureaucratic hierarchy, leading the entire cable industry into a state of confusion.
Will falling behind in one step lead to falling behind in every step? At this point in the discussion, a heavy sense of urgency arises. A few years ago, before the internet launched a major offensive into the home market, cable networks had numerous development opportunities. However, indecision has dragged on, and the window of opportunity is about to close. OTT, mobile internet, and smart devices have already changed user behavior, and the control that broadcasting and television have over users is gradually weakening. If we do not seize the last opportunity for transformation, we will completely lose the chance to catch up.
Cable networks have reached their most dangerous moment. Further promoting deep reforms is the only way to resolve this danger, and this reform involves thoroughly introducing market economic thinking to wash away existing bureaucratic mindsets and administrative malpractices. By entering market competition as enterprises, we must quickly capture market demands, meet those demands, and thereby create market demand. This is also the key to the invincibility of internet thinking.
Only in this way can cable networks have a glimmer of hope.