Business / Industries

TV makers seek new channels as viewers tune out

By Wang Zhuoqiong (China Daily) Updated: 2015-01-15 09:13

Producers face challenges as mobile devices proliferate and a weak property market hits appliance sales, reports Wang Zhuoqiong.

The television market in China faded last year, despite expected strong growth in the high-resolution 4K TV sector in 2015, according to an industry survey.

The popularity of mobile devices among consumers caused a significant contraction in TV sales. According to the 2014 Flat TV Consumption Report and Forecast for 2015, released by the China Electronics Chamber of Commerce, about 22 million flat TVs were sold by retailers in the second half of last year, resulting in full-year sales of 42 million sets.

The number was a decrease of 6.7 percent year-on-year.

Li Dongsheng, chief executive officer of TCL Corp, one of China's leading TV producers, has said that the "unprecedented" decline marked a turning point for the nation's TV manufacturing industry.

Domestic TV manufacturers saw profits slump or even vanish, the result of a trio of troubles: the end of government subsidies for home appliance purchases, weak property markets (new apartments mean new appliances) and sagging consumer confidence.

The other factor seriously affecting TV sales is the rise of mobile devices and streaming video.

Sichuan Changhong Electric Co Ltd posted a net loss of 314 million yuan ($50.68 million) during the first three quarters of 2014, turning from a year-earlier profit. Hisense Group, another leading producer, said net profit slumped 18 percent to 920 million yuan in the same period.

And TCL's multimedia unit, which includes its TV segment, experienced a third-quarter revenue decline of 28.3 percent year-on-year.

Last year, major brands battled to sell TVs with new types of screens. This year, the chamber's report said, flat-screen TVs will replace traditional light-emitting diode models and become mainstream.

To attract consumers back to the living room, 4K TVs, which provide four times the resolution of high-definition TVs on very large screens, will be key.

The market share of 4K TVs has been rising. Industry observers estimate that there are 220 types of 4K televisions in 81 series available in the market, and about 8 million 4K TV sets were sold last year, accounting for 20 percent of the market. The percentage is expected to double this year, according to the report.

Nobuki Kurita, president of Sony China Co Ltd, said the company has put priority on high-end product lines with a focus on 4K TVs. Kurita said Sony will focus on high-end televisions with bigger screens and 4K technology-an area that has not shown any signs of slowdown. Sales of its 4K TVs are expected to rise fourfold from 2013 this year and account for 20 percent of total revenue, he said.

E-commerce has played a major role in the diversification of distribution channels for TV sales. Between January and October last year, around 5.73 million sets were sold online, a 77 percent increase.

Getting viewers to watch programming on TVs rather than streams on mobile devices takes an effort. TVs have been upgraded from simple terminal products to platforms that gather messages, applications and data, said the report.

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