LeEco Moves on the American Market with Strong Content/Ecosystem Play

by Ruby-Ren Bond | Oct. 21, 2016

This week, Chinese CE device and entertainment company LeEco made impressive announcements about its U.S. market entry plans. Which market? All of them. LeEco makes phones, bikes, VR headsets, and even an electric car prototype. It acquired TV manufacturer Vizio in July, and makes its own TV sets as well. It is not dipping its toe into the U.S. market with a single device type but jumping in wholesale with an entire ecosystem of devices.

Recent research from Parks Associates shows that an ecosystem can be a powerful thing, but it’s difficult to achieve. 360 View Update: CE Device Ecosystems evaluates leading CE brands’ ability to attract multiple users and inspire loyalty across a brand’s various platforms. Apple, the most successful device ecosystem, benefits from having the largest percentage of consumers who use more than one of its products. And, those that own more than one Apple product are much more likely to choose Apple when purchasing an additional CE products. But, the ecosystem effect is extremely difficult to achieve. Samsung has achieved some ecosystem loyalty among its mobile products, but that loyalty does not extend to the rest of its CE portfolio. Parks Associates data finds that Samsung’s success in the mobile market does not necessarily translate into greater TV sales.

But LeEco is not just a manufacturer. It is also one of the largest online video companies in China. In fact, it was streaming video before Netflix was streaming video. It recently acquired film production company Dichotomy Creative Group. The studio’s full staff is being brought over to LeEco, including former president of Paramount, Founder and CEO of Dichotomy, Adam Goodman. Goodman will oversee LeEco’s new, U.S.-based subsidiary Le Vision Entertainment (LeVE), which will focus on both rights acquisition and co-production of English-language content for LeEco’s distribution platforms internationally.

In China, LeEco’s strategy for dominating the online video market was to buy consumer electronics companies and start selling smart TVs at competitively low prices. This flooded the market with the technology necessary for a wider potential audience to exist for its video service, LeTV. Findings from Parks Associates’ recently published research, 360 View Update: Streaming Media Device Usage – Beyond Sales Receipts, indicate that streaming media players and smart TVs are poised to overtake gaming consoles as the most common connected entertainment platform in U.S. homes. A positive trend for LeEco.

In the U.S., it’s ecosystem of devices, plus its content-first strategy makes it unique in the market. This holiday season will be a proving ground for whether consumers have a need for yet another tech ecosystem in their lives.

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