Youpeng Pule raised 528 million yuan and was authorized by OTT dual license

On September 21, Youpeng Pule Technology Co., Ltd. held a press conference in Beijing. Shao Yiding, Chairman and CEO of Youpeng Pule, announced three major news:

First, the company completed financing of 528 million yuan;
Second, it completed the signing of cooperation with Guangdong Southern New Media and Guoguang Dongfang Network (Beijing) Co., Ltd., becoming the first company in the Internet TV industry to obtain dual license authorization;
Third, announced the establishment of a new wholly-owned subsidiary Youpeng Media Development Company, which will focus on business development and commercial value realization of the Internet TV B2C market. The company's independent capital action will also be completed within the year.

Shao Yiding said that Youpeng Pule has completed a new round of financing of RMB 5.28, and the company's valuation has exceeded RMB 2 billion. Investors include Qianhai Life Insurance, Dahua Intelligent and Huawen Media. The funds raised will be used to further enrich content and upgrade technical service platforms, vigorously expand the scale of market users, and lay out future industrial development.

Youpeng Pule officially announced the completion of the layout of three major companies: "Youpeng Technology, Youpeng Media, and Huawenyoupeng". The newly established Youpeng Pule Media Development Company has a registered capital of 150 million yuan. The company will focus on business development and commercial value realization in the Internet TV B2C market. The newly established Youpeng Pule Media Development Company will introduce more strategic partners and high-quality financial investment institutions within this year to lay a solid capital base.

Not long ago, HuawenYoupeng Cultural Communication Co., Ltd., which Youpeng Pule and HuawenMedia jointly invested 200 million yuan, will mainly engage in exclusive copyright content procurement, distribution and investment in film and television projects. HuawenMedia will continue to provide HuawenYoupeng with a business development reserve of 800 million yuan.

At present, Youpeng Pule business has begun to provide content platform operation service solutions in the form of IPTV (Interactive Private Network TV), DVB (Two-Way Digital TV), and OTT (Internet TV) full-interactive TV industries.

Shao Yiding also joked at the press conference: Youpeng Pule's financing line will definitely be water-free and can withstand any supervision and research.

At the launch, Shao Yiding announced Youpeng Pule's "different" new corporate positioning. Shao Yiding said that Internet TV (OTT) is no longer enough to cover and accurately define the business scope of Youpeng Pule. At present, Youpeng Pule's business already has content platform operation service solutions in the form of IPTV (Interactive Private Network TV), DVB (Two-Way Digital TV), and OTT (Internet TV) full interactive TV industry, and is committed to becoming the largest interactive TV content platform operation service provider in China.

He believes that the scale of users on interactive TV services directly determines the speed at which commercial value is realized. The end of 2015 will be a watershed. Entering 2016, the scale of user development and the realization of commercial value are equally important. "At least based on the current overall user size of Youpeng, it is fully equipped to mine commercial value. In terms of time, commercial value realization comes first from advertising, followed by content payment and distribution of games and educational products, including e-commerce sales."

Regarding entering overseas, Shao Yiding said: "I hope to build a solid domestic market first. China and Guangdong have relatively good overseas resources. In fact, Youpeng Pule has already done some pilots and experiments in Europe. However, there are cases where content costs increase and overseas sales channels are unfamiliar, but the distribution system of technology platforms can be grafted overseas."

Regarding the issue of listing, Shao Yiding also admitted that all this is in preparation for domestic listing. "I think Youpeng's view on listing is a natural result. Listing for the sake of listing has no good results. The company has corresponding plans and arrangements, including the launch of current capital actions, and all hope to go public as soon as possible."

According to statistics, as of now, the total monthly active users on the service platform provided by Youpeng Pule has reached 16.2 million, and the number of monthly active users of total broadcast users has exceeded 8.2 million.

Interpretation: Is Youpeng Pule's gameplay reliable?

1. Evaporated first-mover advantage If you say that Youpeng Pule is a "recruit" in the OTT TV industry, this is probably not strict. Youpeng Pule started playing Internet TV earlier than LeTV.

According to public information, Youpeng Pule was established in 2006. On March 16, 2011, Guangdong Southern Media Group officially announced the establishment of a joint venture with Youpeng Pule to jointly operate its Internet TV business. Youpeng Pule became China. The first private capital company with legal qualifications to operate OTT TV services.

You should know that the industrial background at that time was that in January 2011, Southern Media became the fourth OTT broadcast control platform in the country to pass the acceptance of the State Administration of Radio, Film and Television, after CCTV Future TV, Shanghai Media and Television, and Zhejiang Huasu. It can be said that during that period, the number of OTT TV players was very small, and only Youpeng Pule's family could directly hug the thigh of the license holder.

In 2011, not long after LeTV completed its IPO, Jia Yueting's focus was still on LeTV's video website. LeTV really entered OTT TV and launched "LeTV Super TV Products" on September 19, 2012. This was a year and a half later than Youpeng Pule.

But what's strange is that in today's OTT TV market, LeTV is doing well, and shipments continue to hit new highs. However, Youpeng Pule, who was the first to engage in the OTT TV business, did not make any "splash", and its first-mover advantage was completely lost.

The older brother who entered the industry earlier was beaten to the ground by his younger brother, which may have made Shao Yiding, chairman of Youpeng Pule, feel very embarrassed.

In 2013, some media reported that Shao Yiding "bombarded" LeEco Xiaomi. He said: "Those companies with very hype are guiding unsuspecting users to the wrong path. It seems that hardware represents the entire Internet TV industry. If a company that engages in Internet TV services goes OUT without playing with a TV or getting out of the box, it is intolerable."

In the first half of 2013, LeTV went viral on "Super TV", claiming to build the entire Internet TV industry chain and shouting the slogan of "subversion." Shao Yiding said disdainfully at the time: "The development of an industry is not subverted by individual companies. Is Jobs wearing jeans and a black T-shirt? Not everyone can be an apple."

2. Regardless of hardware, is Youpeng Pule reliable this time?

Except Youpeng Pule himself, I am afraid no one can explain why this private company that was the first to start making OTT TV in China has developed so slowly.

Of course, some friends in the industry gave reporters such a perspective. That is, a strategic overall mistake caused by Youpeng Pule's over-consideration of hardware terminals in the strategic deployment of OTT TV.

This can be seen from the previous remarks of Shao Yiding, chairman of Youpeng Pule. One of the main differences Shao Yiding was previously dissatisfied, or "angry" with LeTV and Xiaomi was over hardware terminals.

Shao Yiding believes that what users want is not the Internet TV, nor the box itself. What they want is the different services they enjoy after buying back the Internet TV and box. This is the key, and this is what users really need. Why should I focus on the TV and box hardware when I mention Internet TV? Because it is easy to attract attention, but it is typically irrelevant. When it takes hard work to enter the service state, the problems are exposed.

But by now, Shao Yiding's views have been proven completely wrong by the market. The model of LeEco and Xiaomi burning money to subsidize smart TVs, quickly seizing the market through hardware terminals, and then relying on annual content fees to pay back costs has been learned by the entire market.

Including BesTV, Mango TV, Micro Whale Technology, PPTV Cohesion, and Storm Technology, none of the mainstream OTT TV players in the market dare to say that they rely solely on content services and do not need the enclosure of hardware terminals to support them.

What the outside world saw was that BesTV hired Zhaochi to do the OEM of smart TVs and Qingdao Haier to do channel laying. Li Ruigang's Micro Whale Technology began to focus on smart TV hardware on the first day of its establishment, and reduced the price to a level that is even more competitive than Xiaomi and LeTV. There are countless such cases.

But has Youpeng Pule turned back? Did Shao Yiding realize the importance of hardware? The answer is probably not so optimistic. Because at the press conference on September 21, Youpeng Pule still did not mention any topics related to smart TV hardware. Among the offline and online channels observed by the reporter, Youpeng Pule's set-top boxes are not the mainstream of the market, and they are even invisible in many places.

Youpeng Pule said that this round of financing funds will be used to enrich content and upgrade its technical service platform. There is no mention of any hardware terminals. Shao Yiding said in an interview with China Broadcasting Internet in August this year: "Our own TVs or set-top boxes will not be released for a long time now and in the future. Youpeng Pule pursues the goal of 'Youpeng, Youpeng, TV, Youpeng.' Manufacturers with brand channels are all our partners. Making hardware is not our advantage, and the growth of user scale is not achieved by selling hardware."

3. Whose dish is Youpeng Pule?

We have to admit that Youpeng Pule's battle this time was indeed very big. Other OTT TVs are basically bound to only one broadcast control license company (except Xiaomi), but Youpeng Pule managed to get two companies, Southern Media and China and Guangdong, which seems to be very impressive. However, the endorsement of such cooperation may be greater than the essence.

First, let's analyze Southern Media. This radio and television company located in Guangdong Province is one of the first companies to receive approval from the State Administration of Radio, Film and Television. However, objectively speaking, compared with BesTV, Mango TV, and China Digital Media, Southern Media is currently the one with the least achievements among the seven major OTT TV licensees.

Is Youpeng Pule Club the starting point for Southern Media to regain OTT TV? Digital Entertainment believes that this possibility is almost zero. First of all, the two have cooperated before, but four years have passed, and the results are hardly ideal at all. Under normal circumstances, no one will put treasure on the same platform twice.

Second, the joint venture established by Southern Media and Youpeng Pule-Guangdong Nanguang Film and Television Interactive Technology Cable Company. In other words, assuming Southern Media wants to maximize its own rights and interests, the financing entity this time is wrong first. This time, Youpeng Pule's list of six employers includes Qianhai Life Insurance, Dahua Internet of Things M & A Fund, Huawen Media's funds, and three other fund companies. Southern Media is not represented.

So can we basically judge that Youpeng Pule is not a "dish" of Southern Media? So will it be Huawen Media's "dish"?

Huawen Media is not only the investor in this financing, but also a shareholder of Guangdong, the authorized country that granted Youpeng Pule Internet license. On August 4 this year, Huawen Media issued an announcement stating that it agreed to its wholly-owned subsidiary, Huawen Century Film and Television Investment Holdings (Beijing) Co., Ltd., to invest in the establishment of a new company with Youpeng Pule Technology. The registered capital of the new company is RMB 200 million. Among them: Huawen Century invested 120 million yuan, accounting for 60% of the equity; Youpeng Pule invested 80 million yuan, accounting for 40% of the equity. The new company is mainly engaged in the procurement and sales of copyright for film and television drama content.

However, this only shows that: first, the future cooperation between the two parties is currently limited to content copyright; second, Youpeng Pule does not have a say in the cooperation between Huawen Media and Huawen Media.

For a listed company like Huawen Media that not only has broadcast control license resources, but also has strong capital strength, and film and television content production resources, the multi-terminal layout of the OTT TV business is a strategy. The outside world can see that in addition to Youpeng Pule's cooperation, Huawen Media also has equity and business level cooperation with many companies such as Youku Tudou and Dahua Intelligent, and Youpeng Pule is just one of its many layouts.

4. How long can burning money to buy content last?

Obviously, whether it was the establishment of a film and television investment company with Huawen Media last month or the financing this time, Youpeng Pule's main purpose is content.

According to industry insiders, today's Internet TV industry has shown the difficulties faced by video websites. Many companies spend money to buy content copyrights just to gain more users.

And what is the result of burning money? We can see from video websites that they have been losing money for more than ten consecutive years. The industry has been integrating mergers and acquisitions again and again. Although there are only three to five mainstream video websites remaining competing, the industry is still difficult to make profits. It is conceivable that the entire Internet TV industry will also present this scene. A relevant person in charge of an Internet TV company said that at present, it depends on who can burn money until the end. The financing scale of Youpeng Pule is not too large. Now that the content copyright is rising, it will soon be spent. If there is no new money to keep up, it will lag behind its competitors in content and eventually be eliminated.

In fact, in terms of user size, Youpeng Pule claims that the total monthly active users on the service platform it provides has reached 16.2 million, the total monthly active users of broadcast users has exceeded 8.2 million, and the platform's active reading users exceeded 6 million. For such figures, Youpeng Pule claims to be comprehensively leading the industry.

It is reported that these data come from Nielsen Netcom, so let's take a look at the data also from Nielsen Netcom. As the mainstream Internet TV licensee in China, Huasu Media has covered 60 million terminals with Internet TV users alone, and the number of active users has reached 20 million, with a market share of 65%. It does not include IPTV, digital TV and other users. In addition, BesTV has more than 20 million users on IPTV alone. Judging from the size of the two big brothers, Youpeng Pule's user scale advantage is not obvious. If the gap cannot be continuously narrowed, it may face the risk of being merged.

So in addition to burning money to buy content, what is Youpeng Pule's ability to make self-made content? Shao Yiding, chairman of Youpeng Pule, said that the quality of homemade programs on major video websites is getting better and better, and bad online dramas will be gradually eliminated. At present, we have begun to invest purposefully in trying to make dramas. We have planned to negotiate selection with partners and customize them with corresponding companies. This is a release based on the value of the big screen.

Judging from Shao Yiding's statement, Youpeng Pule does not seem to be good at content production.

The ecological construction of OTT TV will not be overnight. Lei Jun spent US$1 billion to make Xiaomi buy content and is still struggling. The outside world will wait and see what results Youpeng Pule's 528 million yuan financing will produce.

Editor: yvonne