Oriental Pearl President Decrypts Internet Ecological Strategy: Will There Be a Battle with BAT?

We are a new type of Internet ecosystem enterprise and SMG's only industry and capital platform. The purpose is to build an Internet media ecosystem with Internet TV as the core.

"We are a new type of Internet ecosystem enterprise and SMG's only industry and capital platform. The purpose is to build an Internet media ecosystem with Internet TV as its core." Ling Gang, president of Shanghai Oriental Pearl New Media Co., Ltd., said in an exclusive interview.

After the reorganization of the enterprise building an Internet ecosystem

, BesTV and Oriental Pearl have changed their names to Shanghai Oriental Pearl New Media Co., Ltd., with a market value of more than 160 billion yuan on the day of resumption of trading, ranking ninth among the world's listed media giants and second only to BAT and Jingdong among Internet companies in China.

To some extent, if you still want to maintain an advantage in future media competition and cross-border competition, establishing a large-scale, multi-dimensional ecosystem enterprise is the only choice for Oriental Pearl.

"First of all, it can be clear that the restructured listed company must be based on the ecosystem in the large Internet industry and will never be closed. Our goal is to create an ecosystem of Internet media companies, but it is different from BAT. Our positioning and foundation are media, so as to enter the Internet industry. Judging from the development trend of the TMT industry, we and BAT will end up at the same end, not just the intersection, but the origin is different, but the business models are based on the realization of traffic in an open ecosystem."

Ling Gang believes that to truly achieve the transformation of the Internet, we must follow the laws of the Internet industry, that is, build an ecological enterprise of the Internet. "The characteristics of the Internet are interactive and open, which means extensive docking and connection, rather than isolated things about the self. Its business format and product form are not the fixed model now."

At the same time, he said, China's cultural enterprises have a very obvious characteristic, is to stay in the vertical subdivision field. This kind of thinking is inconsistent with the development trend of the Internet, because the ultimate leader of the Internet must be ecological enterprises, and enterprises in vertical fields can only work for these leaders and become vassals of the ecosystem.

This obviously means that the long-standing "little giant" model of relatively scattered and stubborn mining of vertical segments is contrary to the development trend of the Internet.

Reengineering Internet-based organization

Therefore, during the reorganization of the two listed companies, Linggang made large-scale adjustments to the organizational structure of the newly listed companies. "We must form our business structure, organizational system and our operating logic in accordance with the requirements of ecological enterprises. This is a must. If we still build a very closed thing by ourselves, there will be a problem." Ling Gang said,"The current strategy is to build a platform. The biggest feature of the platform is its openness, connecting various resources and jointly realizing value."

According to his introduction, Oriental Pearl will achieve professional operation and management in accordance with the Internet system. Currently, its operation organization system is mainly divided into three major sections: content, channels and platforms, and services, as well as 14 business groups. At the business level, these business groups cover many business modules such as film and television production, copyright procurement, TV shopping, wireless transmission, cable TV, Internet TV, mobile advertising, game consoles, cultural tourism and cultural real estate.

It can be seen that the reform logic of Oriental Pearl lies in strengthening the linkage and synergy between different business sectors and business groups, thereby transforming their respective business advantages into transformation energy in platform and ecological sense at the listed company level.

For example, in the content business segment, Linggang said,"Through this segment, we will fully connect with SMG's intelligent manufacturing, including our own content, the program production capabilities of our controlling shareholders, and copyright operation and integrated distribution capabilities., we have established a content aggregation platform; and then use various methods to aggregate larger-scale, more comprehensive, and more distinctive content to form our core competitiveness."

Based on content,

as an Internet media giant born out of the role of traditional content producer, Linggang is well aware of the important position of large-scale high-quality content in the future business model of listed companies. According to official reports, after the reorganization, the Oriental Pearl currently owns more than 40,000 film copyrights, 200,000 TV series copyrights, 10,000 cartoon copyrights, more than 5000 documentaries and other high-quality special programs. It can operate more than 1800 latest theater films every year., blockbusters, more than 10,000 episodes of hit dramas, and has accumulated more than 450,000 hours of high-quality copyrights, including nearly 150,000 hours of high-definition copyright, taking the lead in building China's largest standard definition and high-definition copyright film library.

At the same time, Oriental Pearl, which is backed by SMG, is still expanding its content advantages by purchasing copyright. In the next three years, including fundraising funds, in addition to large-scale self-production, Oriental Pearl and SMG will spend an average of nearly 2 billion yuan each year on copyright purchases such as film, television and dramas.

"Strong content itself is also the entrance to traffic. After the reorganization, listed companies will build content competitiveness through content aggregation and industrial investment, and become Internet media companies with the largest content scale, the strongest comprehensive capabilities, and obvious content advantages."

According to SMG's overall reform plan, Oriental Pearl will jointly invest with SMG in the construction of the group's Internet program production center in the near future, and retain the possibility of reinjecting the content production capabilities and high-quality assets incubated later into listed companies. In addition, New Oriental Pearl will also cooperate fully with domestic and foreign copyright owners in copyright introduction and joint development.

In

addition to strengthening its own advantages as an aggregation platform, Linggang is also learning from the successful experiences of Internet companies such as BAT."When we learn the Ali Spirit, we learn its ecological spirit." In June 2015, at a dinner with Alibaba founder Jack Ma, Linggang vividly compared the similarities between the two giants in the face of Alibaba executives who still did not understand the future transformation of the Pearl of New Oriental.

"Our positioning is also the Internet ecosystem, and it is also to be an aggregation platform that provides conditions and foundation for all people who do things on the platform, and may also have deep binding and cooperation with them. This is the same model as Ali's Tmall and Taobao-providing a platform for everyone to play freely."

Linggang once introduced Oriental Pearl's ecosystem construction thinking of "joint construction, sharing and win-win":

"We cooperate with partners through two levels. First, we must make good use of the industry and capital platform of listed companies and do all possible capital operations., further improve the industrial layout and business structure through flexible methods such as capital mergers and acquisitions and equity swaps; secondly, we must carry out extensive business cooperation. Cable network operators and relevant hardware manufacturers in various places are our partners. We will connect resources and build a good platform to allow partners to gain benefits and achieve win-win results."

In fact, as China's Internet industry evolves to an ecological level,"open or closed" has once again become a new industry proposition, even a metaphor for cruel competition in the era of "digital warfare"-in order to occupy more territory, there are obviously differentiated giants in the resource allocation process, either insist on building a solid "moat" themselves or work together to create a "grand alliance."

Faced with such choices, Linggang pushed the reform logic of the Pearl of New Oriental back to the starting point of Internet thinking. "The characteristics of the Internet are openness and interaction, which means extensive docking rather than absolute internal self-construction. Although we may not have a complete understanding of the Internet today, the development trend is already in front of us. The Internet is an interaction in which everyone participates and should be connected and connected with all related industries."

Editor: yvonne