Burning money on Internet TV is no longer feasible. Can the storm escape LeTV's nightmare?

Comparing Storm and LeEco, this statement is not groundless. They also strive for "big screens" and "ecology", with the same losses and increased financial pressure. Storm and LeEco are easily related by people.

Comparing Storm and LeEco, this statement is not groundless. They also strive for "big screens" and "ecology", with the same losses and increased financial pressure. Storm and LeEco are easily related by people. The once-magnificent LeEco empire has collapsed, dragged down by its huge diversified ecology. Will Storm be the next LeTV? When a large number of Internet TV companies such as LeTV and Storm fall into quagmire, will the collapse of the entire Internet camp accelerate?

At the beginning of its listing, 39 consecutive daily limits were pushed to the altar, and then fell sharply due to poor performance of its main business. It may not be so easy to truly get out of the performance quagmire. Analyzing the situation of Storm Group, it is easy to find a lesson from the past: LeTV.

For example, LeTV started as a video website and quickly diversified and expanded. Jia Yueting even invented a new word called ecological inversion, hoping to form chemical reactions through diversified ecosystems. Later, it even launched non-listed overseas shareholding platforms and LeEco, which covered seven major ecosystems including the Internet, mobile phones, large screens, sports, automobiles, and finance.

LeTV, which seemed to be booming, completely collapsed due to the interruption of the capital chain. On the other hand, Storm is not willing to be outdone in ecological construction, forming four major ecosystems: television, VR, video and sports. At the same time, like LeEco, the four major ecosystems of Storm are also very sad. In particular, the Storm TV business, which has received high hopes, can be said to be a "flash in the pan".

The original Storm was just a video playback tool, but later transformed into a video website. As early as 2014, Storm had already moved all of its libraries into online videos. However, limited by the scale of capital and conservatism in burning money, in the competition with iQiyi, Youku and Tencent Video, it does not have a place of its own, and its audience is pitifully small. In the field of VR, Storm once launched a popular virtual reality product-Storm Mirror, which is called a "plastic toy" by the industry due to the technical gap. The net interest rate of Storm Mirror in 2015 was-18%, which was lower than the net interest rate of-8% of LeEco's "money-mongering" Zhixin Electronics.

Storm TV, which has high hopes, quickly entered the market in 2015 when the Internet TV industry was once bustling. However, money in this industry is not so easy to make. Not to mention the transformation of traditional TV manufacturers, there are more than a dozen Internet brands alone. It is not easy to stand out from the crowd. In 2016, Storm TV's sales revenue was 930 million yuan. Affected by rising prices of raw materials such as upstream panels, the entire Storm Group's annual net profit fell by 70%. Whether online or offline, Storm TV can be said to be no longer in its glory.

Storm is looking for ways to change the current situation, such as restructuring the equity of subsidiaries. However, considering that Storm's main revenue still comes from TV, under the red sea of competition in the TV industry, Storm TV itself, which has no core competitiveness, cannot be profitable on its hardware. It is difficult to make profits by paying users, and Storm will obtain further financing. The possibility is also very small. At present, Storm TV as a whole is in a round of embarrassment of "dilemma".

In the end, this also sounded a wake-up call for Internet TV brands: how to move forward requires some thought. After all, it is no longer possible to burn money, and hype can only degenerate into a bubble and a phantom. Where is the core competitiveness of Internet TV companies?

Editor: Mary