On March 28, the popular domestic internet television service PPStream announced that a second round of ＄10 million worth of financing had been completed with Venus Venture Capital and Lianchuang Ceyuan. The news comes eight days after the State Administration of Radio, Film, and Television called for various broadcasting agencies to punish severely the "China International Chinese Television Station", making it the eighth internet television station that has been punished thus far.

Since the Agency's investigation of the station (www.ccnettv.com) at the end of last year, the National Copyright Administration of the People's Republic of China, the General Administration of Press and Publication of the People's Republic of China, along with other controlling agencies, have indicated that this year, P2P downloading sites that offer pornographic or pirated content will be fiercely dealt with. Meanwhile, the domestic online video industry is experiencing its first downturn after the recent surge.

By the time internet video started to feel pressure, such websites already numbered between two and three hundred in China-- so numerous were they that 2006 was called "the year of online video". Microsoft founder Bill Gates has gone so far as to say that online video would challenge television's status within five years, but that it is not a gold mine for everyone.

Nascent online video companies currently face basic problems-- numerous technology standards, a lack of content, limited bandwidth, and long-term survival limited by initial investment. As a result, content management and the pressure of making profit have pushed many sites to the brink of bankruptcy.

Thus, although online video operators dream of large windfalls, they are now wary of going from pioneers to martyrs.

Crisis-ridden

In a strict sense, internet television refers to websites that broadcast according to a schedule. But now the lines are blurring, and sites offering on-demand viewable content, streaming programs, and fully downloadable content are now regarded as internet television websites. Examples include QQLive, Sina, Sohu Video, as well as Youku and Tudou Networks.

Internet television stations now need operating permits. When the State Administration of Radio, Film, and Television published its "List of organizations permitted to broadcast audio-visual programs online", only 66 websites had received permission, essentially all of which were television stations and cable operators. One industry insider revealed that presently, almost all businesses publicly providing video broadcasts are cooperating with the Agency in a grey legal area.