In today’s fiercely competitive smartphone market, it is no easy task to continue to achieve more rapid growth. As a result of this, many mobile phone brands have started the idea of ”opening new tracks”. Xiaomi, Huawei (Honor), OnePlus, Motorola, Nokia, and other well-known mobile phone brands have entered the TV market cross-border. Today, we will be talking about boot ads on smart TV and the efforts put in place to minimize or control it.
TV Market Vs Mobile Market
Is the TV market better than the mobile phone market? The first three quarters of 2019 in the Chinese color TV market show that China ’s color TV shipments in the first three quarters were 34.6 million units, down 2.8% year-on-year, of which 12.2 million units were shipped in the third quarter.
The year-on-year decrease was 7.4%, and the decline was further increasing. The sales scale of color TVs is gradually decreasing, and the average price of color TVs has also dropped to a new low.
In addition, according to the forecast data of global TV shipments in the first quarter of 2020 released by market research agency TrendForce, the shipments of the top five TV manufacturers in the world have declined to varying degrees, of which the mobile phone brand Xiaomi has the largest decline.
Research has shown that for low-cost smart TVs, the real profit of its products is not in the TV price. Statistics show that the scale of over-the-top(OTT) advertisements in 2019 is expected to reach 10.9 billion, of which about 2.6 billion are one-off advertisements, accounting for up to 24%.
In 2017, the low-cost TV brand LeTV ’s TV start-up ads reached 1.8 million a day, which means that its start-up ads can earn $178 per second. Use low prices for traffic, and use traffic to exchange advertisers’ advertising fees. This is how low-cost smart TVs make money.
Efforts to Stop Boot Ads on Low-Cost TV
But now, this way of making money is about to die. In early April, the China Electronics Video Industry Association officially released the “Smart TV Start-up Advertising Service Specification“, which clearly stipulates that the total duration of start-up advertising should not exceed 30 seconds, and will be officially implemented on September 13, 2020.
It is understood that the specification determines that manufacturers must inform consumers that smart TV has a boot advertising service during online and offline sales, and prohibit any form of concealment or intentional avoidance.
In addition, when the smart TV is not connected to the Internet, the startup advertisement should not be provided. At the same time, the total duration of the startup advertisement should not exceed 30 seconds, and the shutdown prompt message should be displayed when the advertisement has the ability to turn off.
At the same time, the standard also requires brand manufacturers to make clear prompts for products with boot ads in product sales, as well as in product manuals, packaging boxes, and system interfaces, so that users can choose products with informed knowledge and maintain consumers’ right to know.
Furthermore, in order to protect the user experience, the standard provides the service acquisition conditions, start time limit, broadcast duration, advertisement reminder, remaining duration reminder, closing ability, and legality, effectiveness, fluency, and clarity of the advertisement for smart TV startup advertisements.
Degrees, maximum volume, and other aspects have put forward clear requirements, and provide verification methods in the standard.
Effect of Smart TV Start-up Advertising Service Specification on Smart TV Makers
Undoubtedly, under this kind of regulation, the income that low-priced TVs can get through boot advertising will be greatly reduced.
So, in order to make the product still profitable in the environment of low price competition, manufacturers may only have to “find a way” in terms of cost.
Recently Xiaomi TV users have been complaining that its TV products have been used for less than half a year, and serious quality problems have appeared on the screen.
Industry sources told Home Grid that for mobile phone brands that lacked experience in opening TVs, the idea of quickly launching low-cost TV products and quickly raking in money from the market is really naive. As the rules of the OTT market are gradually standardized, there are actually not many loopholes available for low-cost TV products.