The LeEco US launch on Wednesday spoke boldly of creating an ecosystem stretching from self-driving cars to UHD TVs. Content was part of the announcement, but there certainly wasn’t anything bold or new about the approach.
LeEco in China
LeEco is a big deal in China. It was launched as a streaming media company, and was the first to go public, according to Danny Bowman, LeEco’s Chief Revenue Officer. Its streaming site delivers 730M monthly uniques and the company’s web original Go Princess Go has generated 3.3B views worldwide. The company expanded into smart TVs in 2013, becoming the #1 selling brand in China. It also entered the smartphone market in 2015, and has already sold 70M units.
The LeEco ecosystem in the US
On Wednesday, the LeEco US launch event in San Francisco was a big affair. It announced the availability of new Android smartphones, smart TVs, a “super-bicycle”, and even the 2017 release of an autonomous electric car. It’s also offering very aggressive pricing on the smartphones. The top-of-the-line LePro 3 has a top-notch Snapdragon processor and 64Gbytes of storage and is offered at $399 (with a confusingly worded leRewards rebate of $100.)
All of these devices are bound together by the LeEco ecosystem. This includes a CDN, leCloud, with 750 worldwide nodes and a 30Tbps capacity. There is a common app framework called LeView, and the Ecosystem User Interface (EUI) defines how content is navigated on devices. There is also a customer communications platform called UP2U, which LeEco customers can use to give feedback to “help shape the services and products.” There is even a store to buy the products, called LeMall.
The most common word used in the presentation was ecosystem. It’s clear the company means to take on the other ecosystem giants of our industry, Amazon and Apple. And video content is a critical part of that play. Unfortunately, there seems to be nothing bold about LeEco’s approach there.
LeLive and Le content services
Two video services will feature prominently on the LeEco smartphones and TVs, and may even feature in the electric car when it is introduced. The first is LeLive, an app providing 9 linear channels of “television” type content. The second is simply called Le, and provides on-demand content. Le appears to provide some TV and movie content, and set of other channels which users can subscribe to one-by-one. This seems to be similar to the model employed by Amazon with its Channels (formerly called Streaming Partners Program.) Companies participating in Le include MGM, Lionsgate, Showtime, Vice, Sling TV, SeeSo, and about 20 others.
There were rumors in September of a deeper relationship between LeEco and Netflix. These appear to have been false. The Netflix app is included on LeEco devices, as it is on pretty much every other connected device. However, there does not appear to be any other relationship. For example, Netflix is not listed as a partner of LeEco’s for this release. Neither is Hulu nor, perhaps predictably, Amazon.
The company was very vague on the details of LeLive and Le. For example, no pricing was given, no business models discussed, and a detailed list of the content available natively through the services was not provided.
What’s in it for the content provider?
In China, LeEco provides meaningful distribution for content providers. The company is the smart TV leader, and the Chinese like to use the smart TV interface to access online video. It is also rapidly becoming an important player in smartphones.
LeEco purchased Vizio earlier this year, and Jeff Briller, GM of Content for LeEco, said the company intends to use that footprint to distribute LeLive and Le content. However, in the US people prefer to use TV connected devices, like Roku and Apple TV, to access online video. And, of course, the company is starting from scratch in the US smartphone business. Of course, if the LePro 3 is hit the company could gain market share quickly.
With no meaningful footprint in the device categories that count, and no apparent innovative approaches to the content market, LeEco has little to offer either the consumer or the content provider today.
One last note, LeEco’s CEO YT Jia hinted of a big content announcement on November 2nd. A big announcement with Netflix, or a Hollywood studio like Disney, could make a big difference.
Why it matters
LeEco US launch promised to take on the big ecosystem providers like Amazon and Apple.
The company has made a good start with its televisions, smartphones and bold vision.
However, the content offering is unexceptional and offers no advantages for consumers or content creators.