Date
17 December 2017
With two masterstrokes
With two masterstrokes

Alibaba smart TV: Home invasion of a different kind

Jack Ma has just bought his way into your living room.

The brains and visionary behind Alibaba’s buying spree paid 6.54 billion yuan (US$1.05 billion) for a 20 percent stake in Shenzhen-listed cable network operator Wasu Media (000156.CN).

The deal gives Alibaba Group Holding a foot in the door of millions of homes in which to pitch its smart television operating system while opening a distribution channel for its planned cultural and entertainment programs targeting cable users in Hangzhou.  

This is the first deal Ma has made in the A-share market this year after snapping up controlling stakes in three Hong Kong-listed companies, the latest being ChinaVision Media Group (01060.HK), a maker of television programs and motion pictures, in which it invested HK$6.23 billion for 60 percent of the stock.

Alibaba and Wasu will cooperate to develop original content for games, music and education geared to online channels and internet television, as well as offer cloud computing and big data services.

In fact, this is not the first partnership between Alibaba and Wasu Media. Last year, Wasu launched a smart TV running Alibaba’s operating system.

It was the first indication Alibaba was stepping into the online media market where rivals Tencent Holdings Ltd. and Baidu Inc. have had a head start. Driving the strategy is a growing trend of users migrating from personal computers to smartphones, tablets and internet TV.

Alibaba now has the ability to link internet devices and TV sets on its proprietary smart TV operating system, enabling a host of services from shopping to online payment straight from the living room. One such service is already up and running in group buying site Juhuasuan and Alibaba’s third-party payment processor Alipay.

China’s online home entertainment market is expected to see rapid growth as people look for more viewing choices and services on the internet.

Increasingly, they’re finding that the usual mix of programs and services from China’s state broadcasters is not enough. They want top-of-the-line services, higher-quality programs and don’t mind foreign content. The success of set-top boxes such as Xiaomi Box and other similar products proves that point. 

Wasu Media, which operates a cable television network in Hangzhou, and ChinaVision complete Alibaba’s foray into upstream content production and downstream distribution in the online media sector. 

In addition, Wasu has established an alliance with internet TV providers, set-top box manufacturers, TV makers and chip foundries including Huawei Technologies, Skyworth Digital (00751.HK) and Cisco that could support Alibaba’s smart TV products. 

Meanwhile, Alibaba is planning to release a remote app which allows users to control Alibaba smart TVs with a smartphone and enable them to share content from user handsets to TV sets. Video calling features are also in the works.

No doubt, these developments are being watched very closely by Tencent and Baidu. 

– Contact us at [email protected]

RA

 

EJ Insight writer

EJI Weekly Newsletter

Please click here to unsubscribe