China Clamps Down on Online Video

Filed in archive Internet on January 5, 2008

I loved this question from fellow blogger Tim Faulkner: "What's more evil than Google? A Google partly controlled by the Chinese government."

Okay, I'm not sure that I think evil is really the appropriate adjective for Google, Inc. But the Chinese government wants to implement state-ownership and/or control of video sharing sites accessible in China, and the obvious question is how that will impact the Google-owned site, YouTube - popular in China. Will it effect it at all outside of China?




Of course, all the usual statements about the evils of censorship in China also apply. Add another level to the Great Firewall of China...

The video sharing industry has been a venture capital playground in the past in China. The new regulations on video sites is sure to intensify the trend of VC money shrinking away from IT in China. A number of video sites in China are waiting to see if the government will take control of their private businesses.



The new regulations, jointly issued by the Ministry of Information Industry and the State Administration of Radio, Film and Television (SARFT), require websites to obtain government permits before they provide video programming over the Internet or allow users to upload video. To get such a permit, the website has to be part of either a state-owned or a state-controlled company. But the majority of Internet video providers in China are private, according to Eliza Popescu at Blogging Stocks Dot Com.

Justin Moresco at Red Herring names names.

There are now at least 120 Chinese online video-sharing sites, according to the blog China Web 2.0 Review. Some observers believe there are several hundred more.

The leading ones-56, Youku, and Tudou-are privately held, receive millions of unique visitors per month, and have attracted high-profile venture capital firms.

Youku, for example, is backed by Silicon Valley-based Sutter Hill Ventures, and had a $25 million third round of venture funding in November. Investors see the promise of ad revenue as more Chinese go online and use video sites.

YouTube released this statement about the potential effect of the new regulations on its site: "China's new regulations for online video could be a cause for concern. We believe that the Chinese government fully recognizes the enormous value of online video and will not enforce the regulations in a way that could deprive the Chinese people of its benefits."

The new regs take effect on January 31.