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This report presents analysis of market development, competitive strategies and impacts on incumbent players. China’s mobile online service users have grown rapidly but most users still favor free online services; thus, OTT service providers can only rely on ads revenue to pay for huge license fees, CDN (Content Distribution Network) construction costs, as well as platform maintenance and overhead expenses; facing a saturated market for mobile services, TV has shed the light for conventional OTT service operators who seek out for new threads of opportunity.
Meanwhile, the introduction of OTT service operators has triggered price wars in the TV market and has eroded further the profitability of TV brands; controlled by license holders, TV content alone is hard to create differentiation and thus TV UI and app improvements are critical for OTT service operators to increase revenue; lack of applications developed specifically for smart TV experience will pose a significant challenge to future smart TV development.
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