Recently, LeEco has once again received attention and heated discussions on the Internet.
However, this time, it is not because of the relatively negative news such as the break of funds and the sale of assets as in the past, but because there are still more than 400 employees in this almost forgotten company, and the company relies on film and television. The copyright income and the rental income of the building are still alive and well.
You know, this is a company that often appears in the dock, and even appears on the enforcement list from time to time.
The reason for the incident is that a Weibo blogger recently posted that there are still more than 400 people left at LeTV, many of whom are old employees of more than five years.
These old employees said that “happiness is the reason for many old LeTV people to stay.” In addition, employees live a fairy life of “no boss”, and the company has film and television copyright income such as “The Legend of Zhen Huan” and building rentals.
In response, LeTV responded that yes, we still have more than 400 people, looking forward to new friends to join. In response to the company’s claim that there is no “boss”, no invoicing and 996, LeTV also said:
1. LeTV does not have 996, and there will not be any in the future. Work is never done, and it makes sense to get a limited amount of work done in a limited amount of time. Don’t be surprised if one day we legally take the lead in implementing a four-and-a-half-day, 36-hour workweek.
2. It is too absolute for LeTV employees to have “no involution”. After all, where there are people, there are “jianghus”. It’s just that in LeTV, the level of “inward roll” is lower, because there are only more than 400 employees, and many positions are “one radish and one pit”. Who do you roll with? But if there are more than one or two people, it may be rolled up.
3. The company has never owed wages and social security to its employees in the past five years.
4. We can’t afford the expression “the day without a boss”. The work like a fairy is basically a luxury for any employee. If employees can feel that “the work is like a fairy”, the company must be very successful. The term “boss” has been a relatively vague concept in recent years, with different meanings in different contexts. Many corporate department employees privately call the department head the boss, the department head the CEO the boss, and the CEO the chairman, founder, and actual controller as the boss. According to this understanding, LeEco will have many “bosses”. The person in charge of each business is the boss, the CEO and the chairman are the bosses, and we are also called the boss when the shareholders visit the company. The founder Mr. Jia Yueting is also the boss, and the original strategic shareholder “Sunac” also came boss. Therefore, LeEco is not without a boss, perhaps because the “bosses” of the company’s various business lines are diligent and conscientious, and do not need other higher-level “bosses” to do their own work, so that everyone feels that there is no boss.
After the official response, many people were surprised, “LeTV still has so many people?”
For most people, LeEco used to be a legend in the Internet industry, but at the same time their memory of the LeEco department was still stuck in the crisis that broke out five years ago. Many people thought that LeEco was dead by then.
But in fact, after a series of business turmoil and debt crises, this once-discussed company, on the surface, seems to be quietly making a comeback and getting back on its feet, but is this really the case?
LeTV, is the muffled sound returning to the blood?
At the end of 2016, after the outbreak of the capital crisis of LeTV, it began to enter the stage of rest and reorganization. The actual operation of the company gradually became a mystery, and its voice in the Internet industry has not been as good as before.
But just last year, LeEco, which had been silent for a long time, suddenly showed some signs of life.
In the Spring Festival of 2021, various major APPs have launched year-end plans to share red envelopes. The LOGO is full of large amounts: Alipay Jiwufu 500 million, Douyin 2 billion, Kuaishou 2.1 billion, Baidu App 2.2 billion, Pinduo 2.8 billion more points. However, netizens found that the Android version of the LeTV video app also came to “join in the fun”. After the new version was updated, the logo of the icon was changed, but the display turned out to be the words “owing 12.2 billion”…
The icon incident of “owing 12.2 billion” rushed to Weibo hot search, Zhihu hot search, Baidu hot search overnight, and even triggered extensive discussions in WeChat Moments and WeChat groups.
After the incident “fired”, the text was changed to “The boss builds a car in America, and returns to the public’s vision in a “self-deprecating” way.
This “12.2 billion owed” icon incident has successfully aroused extensive discussion among netizens, and it has also been searched on Weibo. Contrary to the trend, it broke the rumors of LeTV’s “collapse”.
Many people realize that LeEco, which has been silent for several years, is still there.
Later, officials confirmed that this is the approximate amount LeEco currently owes. Although still in debt, LeEco will quietly increase its business in 2021 to recover blood.
In the eyes of the outside world, the three most intuitive manifestations are that in the context of Internet layoffs, LeTV has publicly announced: 1. All employees will increase their salary; 2. There will be no layoffs; 3. Operating profit and cash will be realized in 2021. Double balance of flow.
On December 21, 2021, LeTV Video released a Weibo saying that major events will occur frequently in 2021, and we will move forward. In 2022, we will be one step closer to a well-off life! One of the hashtags is #LeTV has raised#
Subsequently, on the morning of December 22, LeTV Video updated its Weibo again, saying that LeTV announced that it would not lay off staff.
According to public reports, Lerongzhixin has about 240-250 people, and LeTV now has about 200 people, a total of about 450 people.
For the two companies, the monthly salary is about 10 million, and the total annual salary is about 120 million. According to LeTV’s 2020 revenue of 486 million yuan, employee wages account for almost a quarter of revenue.
In the stalls where most of the big Internet factories were fired, this wave of no layoffs and salary increases for all employees has made LeEco’s favorability in the outside world soar again.
In addition to employee benefits, LeEco’s performance has also had a good turnaround.
At the beginning of 2022, LeEco pointed out in an internal letter to employees, “In November 2021, TV-side operations, mobile-side operations, advertising commercialization and other businesses have achieved their annual business goals ahead of schedule. Without considering the impact of historical debt, the latest operating data The double balance of operating profit and cash flow is achieved for the first time in the past few years, which is of great significance.”
According to media reports, on the day of the release of the internal letter, LeTV was full of joy. The old LeTV people were all concentrated in a large conference room. Someone connected Jia Yueting on the spot and told him that the flames of LeTV were still there.
Leifeng.com learned that in 2021, LeTV will release about 90 new TV series and about 350 movies. According to the semi-annual report released by LeTV, the revenue of LeTV in the first half of 2021 was 196 million yuan, a year-on-year increase of 38.55%.
In recent years, LeEco has spoken out many times, and sometimes published articles to ridicule itself. The copyright of film and television dramas and the rent of buildings have also become the key to LeEco’s continued operation.
According to the data, “The Legend of Zhen Huan” has been on the air for 11 years, and it is still bringing revenue to Huaer Film and Television (one of the production companies of “The Legend of Zhen Huan”). Dun Yong, the founder of Huaer Film and Television, said that the show “can bring more than 10 million yuan of revenue to Huaer Film and Television every year on average”.
In 2011, “The Legend of Zhen Huan” was first broadcast on TV channels, and then LeTV Video obtained the exclusive broadcast rights on the Internet. In 2013, Huaer Film and Television was acquired by LeTV in its heyday for 900 million yuan. In 2018, LeTV encountered a capital chain crisis, and Huaer Film and Television distributed the copyright of “The Legend of Zhen Huan” to Youku.
Today, LeTV Group is different, but “The Legend of Zhen Huan” is still the core IP that can be paid to watch on LeTV Video. LeTV video official Weibo once said, “If the copyright is not sold by Huaer in 2018, LeTV will now have more blood, and LeTV video can rest assured.”
Self-help and struggle behind
In recent years, LeEco has not stopped trying. However, limited by funds, what the LeTV team can do in recent years is also limited.
It is not difficult to see from the dynamics of LeEco in the past one or two years that LeEco is starting from ecology and gradually returning to the public eye.
In August 2020, LeTV and the home appliance distribution channel “Huitongda” reached a strategic cooperation. Not only that, LeTV has also applied for “Letv”, “Le”, “LeTV” and other categories 7, 9 and 11 trademarks. The trademark commodity categories include dishwashers, household electric ovens, gas stoves and other kitchen and bathroom appliances.
In 2021, in addition to super TVs in smart hardware, LeTV will also release digital 3C products such as VR, reverse headsets, and gamepads, as well as some smart home ecological products, such as range hoods, integrated stoves, smart door locks, etc. .
In addition, judging from these products released in 2021, LeEco is gradually restructuring its ecosystem, changing from the original “ecological reaction” to a “smart ecology”.
According to Zhang Wei, CEO of LeTV TV, the sales volume of LeTV TV in 2020 will be about 400,000 to 500,000 units, and the whole team of Lerongzhixin will be around 240-250 people. Zhang Wei also said that Lerong Zhixin, which focuses on the TV business, and LeTV Video, which “owes 12.2 billion”, are separate, but the latter still holds a stake in the company.
Although these moves are considered to be the comeback of LeTV TV, in fact, the industry has already changed.
An obvious example is that LeEco and Xiaomi, which also rushed into the home appliance industry through the Internet model, have already formed a completely different development state – LeEco TV gradually disappeared from people’s field of vision after the collapse, while Xiaomi TV skyrocketed when LeEco was in decline. , domestic shipments have ranked first for eight consecutive quarters.
In 2016, the sales volume of Xiaomi TV was only 1/6 of that of LeTV. At that time, LeTV TV could be described as “popular and watery”.
After LeTV’s failure, Xiaomi TV took over part of the market size and continued to expand the market size under the “cost-effective” approach. In Q4 2018, Xiaomi TV topped the domestic TV market with 8.4 million shipments, taking the first place.
Today is different from the past, LeTV has been overtaken by its opponents for too long. So much so that when Wu Guoping called out the declaration of “LeTV Smart Ecology Return”, there was almost no turbulence in the market, and people didn’t have much expectations for LeTV TV.
Not only that, but LeTV video is not too good here.
In the past few years when LeTV was lonely, iQiyi, Youku, and Tencent Video developed in full swing. The representative player in the medium video field, Station B, was in full swing. Almost occupied the leisure time of all netizens.
This is a lot of pressure for LeEco.
According to FunTalk, LeTV has also set up short video projects as a key project, formed a team of dozens of people, and also hired senior experts from the industry to be COOs, but it has not been done. Because based on reality, LeEco can only edit existing copyrighted videos, but this requires a strong operation team. However, the paradox is that LeEco cannot invest manpower like other companies.
Some LeTV employees said that to be honest, there is no way to compete with Douyin and Kuaishou in terms of content.
The beginning and end of the crisis: insufficient hematopoietic ability, relying on selling assets to survive
From 2015 to 2016, it was the stage of rapid development of LeEco. Jia Yueting stated in the open letter that LeEco rapidly expanded to more than 5,000 people in that year. The speed of recruiting is unmatched. LeEco employees also witnessed the growth of employee number from more than 8,000 to more than 20,000 within 14 months. The workstation was so tight that the conference room became an office area, and the meeting was forced to move to the cafeteria.
In October 2016, the capital chain crisis broke out in the LeTV system, and the stock price fell all the way.
The reason for this is Jia Yueting’s full letter “LeTV’s Seawater and Fire: Is it engulfed by giant waves or boiled ocean?” published on November 6, 2016. ” has been explained –
Our funds and resources are actually very limited. On the one hand, LeEco invested a lot in the early stage, and spent more than 10 billion of its own funds, which directly led to my personal lack of financial support for LeEco;
On the other hand, our financing ability is not strong, the method is single, the capital structure is unreasonable, and the scale of external financing is difficult to meet the rapidly expanding capital needs.
At this time, LeEco was in a state of “insufficient hematopoiesis and excessive blood loss”.
It is worth mentioning that in January 2017, in the early days of LeEco’s capital crisis, Sun Hongbin invested 15 billion yuan, but he could only temporarily stop the bleeding; after all, LeEco’s “wound” was too big.
Although LeEco received investment many times during its business expansion in the early days, it was far from enough for LeEco, a “bloodthirsty beast”.
The contradiction of LeEco is that the input of capital is far from keeping up with the large-scale business expansion, and LeEco’s own hematopoietic capacity is insufficient. Therefore, once there is a problem with the capital chain, LeEco begins to falter.
Judging from LeEco’s financial report, after 2013, LeEco has shown signs of loss. The operating profit in 2014 was only RMB 50 million, a year-on-year decrease of 80% compared to RMB 250 million in 2013.
By 2015, LeEco began to turn negative profit. The operating profits from 2015 to 2016 were -100 million yuan and -370 million yuan respectively.
LeEco’s operating profit continues to decline, which is not unrelated to Jia Yueting’s business model.
At that time, in order to open up the LeTV ecosystem, Jia Yueting took the “negative profit marketing” strategy as the basic model, that is, selling hardware at a low price to acquire users, and then using the membership model to convert hardware users into strongly related sticky users.
It is understandable to expand the market at a low price, but LeEco’s marketing strategy is too extreme, and the hardware price is too low, which not only does not make profits, but also causes huge losses.
Under the “losing business”, the sales of LeTV hardware products are very impressive; in 2016, the sales volume of LeTV TV was even nearly 6 times that of Xiaomi TV.
But the more you sell, the bigger the loss, and LeTV’s “blood loss” keeps getting worse. According to the financial report data, from 2013 to 2015, the losses of LeTV TV terminals increased year by year, which were -184 million yuan, -1.352 billion yuan, and -2.097 billion yuan respectively.
Not only LeTV TV, but also the development of mobile phone hardware also adopted the same strategy. This time, the “anemic” LeTV was unable to support it. At that time, some media broke the news that LeTV owed suppliers as much as 10 billion in debt, and the capital chain crisis was imminent.
Although LeEco had a financial crisis at that time, its business expansion did not stop. So, where does the money come from?
Fancy financing. According to media statistics, between 2014 and 2016, the financing scale of the LeTV system exceeded 75 billion. Among them, the financing scale of listed companies is about 34.3 billion yuan, the IPO issuance financing is 730 million yuan, and it also includes fixed increase financing and bond financing.
Behind the huge financing, Jia Yueting pushed LeEco, which is very optimistic about the capital market, into the fire pit step by step through various methods such as equity pledge and capital lending.
According to relevant statistics, from 2013 to 2015 alone, Jia Yueting’s family pledged 38 shares of LeTV. By 2017, whether it is listed LeTV Sports, LeTV Zhixin, LeTV Auto, or real estate, all of them will be pledged. The repeated equity pledges have had a negative impact on LeEco, the capital market has lost confidence in LeEco, and LeEco’s ability to attract money is not as good as before, which has fallen into a vicious circle for LeEco, which needs to burn money urgently.
In addition, the chaotic transactions between LeEco and Jia Yueting’s affiliated companies have further increased LeEco’s funding gap. At the “Investor Briefing on Termination of Major Assets Restructuring Matters and Company Operations” held in January 2018, LeEco announced that since 2016, it has sold goods and provided services to related parties controlled by Jia Yueting. A large number of related receivables and prepayments have been formed by means of fund transactions such as payment on behalf of others——
As of November 30, 2017, the arrears of the above-mentioned related parties to the listed company amounted to RMB 7.53 billion.
It is not difficult to see that Jia Yueting’s “demolition of the east wall to make up for the west wall” has caused LeTV to bleed.
On the one hand, LeEco’s huge ecological development urgently needs capital investment; on the other hand, LeEco’s crazy money-burning business model has increased the pressure on capital, coupled with the chaotic financing and fund dismantling methods, the capital market has lost confidence in it. The funding gap is getting wider and wider.
Since 2018, the story has gradually come to an end. After a nine-month suspension, LeEco resumed trading in A-shares, and then began to drop the limit several times, from 15 yuan to 5 yuan…
On April 26, 2019, LeTV released its 2018 annual report. The net assets were negative, triggering the suspension of listing and the suspension of stock trading. At that time, the stock price closed at 1.69 yuan, and the market value was only 6.7 billion yuan. A month later, LeTV was announced by the Shenzhen Stock Exchange to suspend its listing.
It can be said that since its establishment in 2004, LeTV is now 18 years old. It has experienced a complete industry cycle from the budding period of the Internet industry to the outbreak period, to the peak and the current struggle.
In the years when the LeTV building was tilted, Jia Yueting had already fled.
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