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LeEco partners with AT&T

By Hezi Jiang in New York | China Daily USA | Updated: 2016-11-30 15:22

LeEco announced on Tuesday that it has entered a strategic partnership with American telecom giant AT&T that will include it carrying the US company's DirecTV Now streaming service.

"Our US branch is still a startup, and we are still focusing on laying out our strategy rather than making a profit," Ren Hongliang, president of LeEco North America, said at a press conference with Chinese media outlets in New York on Tuesday. "The partnership with AT&T is a milestone for us."

LeEco, based in Beijing, was founded by CEO Jia Yueting in 2004 as a Netflix-style streaming video platform. It quickly became the largest online video and TV provider in China. LeEco subsequently moved into content production, smart technology and electric cars and expanded its market into the United States and India.

Ren said the company will still keep those lines of business despite Jia admitting in a letter to employees earlier this month that the company has overextended itself financially.

LeEco is planning a holiday-season promotion in the US in which it will offer between three and 12 months of complimentary DirecTV Now access to customers who buy LeEco smartphones and smart TVs from Dec 1 to Jan 5.

DirecTV Now, which starts at $35 per month, lets customers stream live programming on smartphones, tablets and PCs. No cable box is necessary, and no long-term commitments are required.

"This promotion is just the tip of the iceberg," Ren said. "AT&T is transforming from a telecom company to a content provider. From content to cloud to hardware, our partnership has a lot of potential. It will become a comprehensive cooperation."

Roger Entner, founder and lead analyst for Recon Analytics in Dedham, Massachusetts, sees the partnership as a win-win for both parties.

"Chinese technology companies have traditionally had a hard time working with US telecom providers. LeEco is the first Chinese company to overcome that problem and have a high-level, public partnership with a company like AT&T," he wrote to China Daily in an email.

"LeEco gets the largest American telecom provider as a partner, who provides them with a seal of approval in the eye of American consumers who have never heard about LeEco before.

"The partnership validates LeEco's products and services, whereas AT&T gets a partner with new ideas and approaches to the integrated telecom and media world as it tries to disrupt its US competitors," he said.

"I view this as the beginning of a long-term, trusted partnership. I think we will talk a lot more about LeEco in the US going forward," Entner said.

Ren said LeEco North America hopes to build an open content platform on which all content providers are welcome to open their own sites and reach the platform's users.

He said the platform will be like Alibaba's Taobao for entertainment content.

"Content in the US has been very scattered among different content providers. We believe the US content industry has big potential for a disruptive change - a one-stop service," Ren said.

LeEco announced in July that it acquired Vizio, a major US TV brand, for $2 billion in cash. As the deal is going through review, Ren revealed that it is Vizio's 30 million-user base that has LeEco's attention.

"As soon as we update the software of these TVs, we will have that user base for our platform, and the content providers will of course be interested," he said.

An open content platform is actually not a new idea, and Ren said big players such as Disney have shown an interest in it.

"However, Disney's competitors wouldn't cooperate with Disney," Ren said. "But we are an outsider and a new player. We have no conflict with anyone."

An open platform also will save LeEco from paying for copyrights, and that money can be put into another focus of the company: electric cars.

Nevada state Treasurer Dan Schwartz recently expressed his concerns about the fate of Faraday Future -a California electric carmaker backed by Le Eco - that is building a $1 billion plant in North Las Vegas.

Schwartz said factory construction stopped earlier this month, and he believed the reason was no payment had been received from Faraday Future.

However, Faraday Future said in a statement that it never halted work on the factory and finished the first phase of construction, with a plan to move into the second phase in February.

Ren declined to comment on Faraday Future on Tuesday, although he said the company has not shifted its focus in the sector. He said that now is "the tipping point of the revolution of motor vehicles", and LeEco can't let itself miss the chance.

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