Bold Expansion Plans from LeTV (Who?)

Asian Hardware, Asian Content, Western Markets

LeTV_lCCS Insight’s predictions for 2015 included the likelihood of home-grown Asian content coming West — specifically video services for immigrants in Europe and the US. It’s a niche market that’s larger than many European countries. Demographic shifts are combining with broadband and low-cost computing power to enable borderless streaming of local content.

LeTV, a Chinese content, smartphone and TV maker, will be entering the US with hardware in order to sell a video streaming service to Chinese-speaking Americans and expats. It’s a market of millions — Chinese is the most spoken language in the US after English and Spanish, and its use is expanding rapidly.

LeTV was founded about 10 years ago in Beijing, and has become a main provider of Internet services in China. It’s now combining its content with its own-branded hardware. The company has copyrights to more than 100,000 TV series and 5,000 movies (including some Western-made films), has about 5,000 employees and a market capitalization of more than $12 billion.

The company is currently establishing offices in California, preparing to release a high-end smartphone and television set to accompany its paid video streaming services and apps. LeTV’s content will be available across televisions, mobile devices, and computers, and it also lists automobiles as another “screen of access”.

LeTV isn’t a familiar brand in the West, and the company’s long-term goal to become a mainstream provider of content and hardware appears overly ambitious. But LeTV is entering Western markets at a time when Chinese brands such as Alibaba, OnePlus, Oppo and Xiaomi have established a reputation and even waiting lists in Europe and North America (see Daily Insight: Premium China). Chinese companies are using their local success as a springboard into other markets. We expect this to continue.

LeTV isn’t alone in rolling out Asian cloud-based video streaming services in Western territories, and CCS Insight believes more Asian firms will target specific markets to establish themselves internationally. The strategy to combine hardware and video could enable more smartphone, tablet, and TV brands to establish themselves, allowing services and subsidized devices. Asian content is in demand.

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