The Radio and Television Administration has decided to build a "National Network". Is the IPTV of the three major operators in danger?

Many people may not know that the traditional radio and television industry is not a unified national network, but a state of provincial separatism. There are 11 radio and television enterprises in each province, including China Gehua Cable, Oriental Pearl, China Media Group, China Radio and Television Network, Tianwei Video, Jiangsu Cable, Guizhou Radio and Television Network, Guangxi Radio and Television, Wasu Media, Jilin Television Media, and Hubei Radio and Television.

But when China Radio and Television obtained the 5G commercial license last year, the radio and television system began to organize the "one network across the country". In February this year, the Central Propaganda Department proposed that China Radio and Television take the lead in establishing China Radio and Television Network Co., Ltd. in conjunction with provincial network companies and strategic investors to integrate the national network. At the same time, a 5G network with radio and television characteristics will be established to achieve the integrated development of "one network across the country" and 5G.

On June 8, according to media reports, the "National One Network" joint-stock company will complete the listing of China Radio and Television Corporation on June 30 this year, and all sponsors will complete the asset injection work on December 30. By then, a unified operation and management system will be established, and the chaos of "local separatism" will end.

As we all know, the current operation of traditional cable TV is worrying, and the number of users has been declining in recent years. According to relevant statistics, in the fourth quarter of 2019, the total number of cable TV users in my country was 209 million, the total number of cable digital TV users was 192 million, and the number of paying users was 144 million.

The latest "China Cable TV Industry Quarterly Development Report for the First Quarter of 2020" released by Gran Research shows that as of the first quarter of 2020, the number of paying cable digital TV users was 142 million, a net decrease of 1.962 million. The total number of cable TV users decreased by 3.104 million to 206 million, and the share of cable TV in user household TV viewing fell to 45.58%.

Cable TV has lost its dominant position mainly because competition in cable TV video content services has become increasingly homogeneous, and it has also been affected by factors such as the rapid development of interactive Internet protocol television (IPTV), Internet TV, and online audio-visual services, and changes in user viewing habits.

Compared with the decline of cable TV, IPTV has risen very fast. IPTV started to develop in 2016, and by the end of 2017, the number of IPTV users reached 120 million. In 2018, IPTV experienced explosive growth, and by the first half of 2019, the three basic telecommunications companies had developed 281 million IPTV (Internet TV) users.

By comparison, we can see that the number of IPTV users in my country has exceeded that of cable TV users. It is understood that the main reasons for the loss of cable TV users are that the fees are too high and there are too many advertisements, which leads to poor user experience.

The IPTV services launched by the three major operators are additional items based on broadband services, and the charges are very low. Sometimes operators even sell broadband and IPTV services together, which is more affordable than buying broadband alone. For example, the video broadband service launched by Hubei Telecom includes 100Mbps fiber broadband and 4K Tianyi HD, and only costs 1,299 yuan a year.

Telecom Tianyi HD is not only affordable, but also highly autonomous and rich in content. Users can watch live programs through IPTV, and can also watch the programs they want on demand or recorded, without having to watch lengthy interstitial ads. They can watch whatever they want, which is very convenient.

Although the radio and television industry has planned to adjust cable TV after obtaining the 5G commercial license, it is expected to make a comeback. However, according to my observation, since many households have installed broadband, it is most cost-effective to use IPTV services. As the penetration rate of IPTV users increases, people are more willing to watch IPTV.