Website moves into smart TV

Letv.com, one of China's major online video websites, announced a foray into the smart TV sector Wednesday.

However, some analysts said the move's prospect may not be as rosy as it looks.

Letv will release its own smart TV and plans to inject at least 100 million yuan ($15.8 million) into a subsidiary in charge of its TV business over the coming 12 months, the company said in a press conference held in Beijing Wednesday.

Letv is ready in terms of both hardware and software to release its own smart TV, because it has experience in the set top box business, and it owns an Internet TV license indirectly after teaming with CNTV, the company said.

Global IT giants such as Google and Microsoft have entered the smart TV sector, believing there is a giant market potential. Lenovo also released smart TVs in May this year, Liu Bucheng, an expert on the home appliance industry, told the Global Times Wednesday.

"But none of these companies have achieved success in their smart TV businesses so far. Letv has no advantage compared with them," Liu said.

The online video sector is booming in China, having a 50 percent quarter-to-quarter growth in the second quarter, with viewers hitting some 400 million, according to industrial data provider iResearch Consulting Group Wednesday.

Driven by the boom, Letv also grew quickly, and it was the fastest-growing online video website, with a monthly compound growth rate of 17.9 percent in 2011, iResearch said.

Letv expressed confidence in the future of its smart TV, asserting it owns copyrights to over 4,000 films and 70,000 episodes of TV series, making it one of the largest Chinese video websites.

The market potential for TV products in China is huge, with around 50 million units sold annually and sales of 200 billion yuan, according to Letv CEO Jia Yueting.

However, Zhao Xufeng, an online video analyst at iResearch, said she was less optimistic about the potential for Letv in the smart TV business as the business is still budding in China, Zhao told the Global Times Wednesday.

"Currently there are less than 50 million users for smart TVs in China and the number will have trouble growing quickly due to barriers such as consumers having to buy a set top box to watch the TV."

Another problem is that the service provided by smart TV can be easily replaced, said Liu, noting that smartphones and other devices do almost the same thing. Worsening the prospects for smart TV, "The State has much stricter approval requirements on the contents for smart TV than for smartphones," Liu noted.

"We have no comment on the move by Letv," Jiang Xin, Sohu's senior communications manager, told the Global Times Wednesday.

Tv.sohu.com is a major rival of Letv.