21st Century Business Herald, 12/24/11
China's State Administration of Radio, Film and Television (SARFT) recently issued its "Operation and Management Requirements for Licensed Internet Television Operators," which requires that internet TV set-top boxes be operated only in cities selected for China's network convergence trials. The document requires that Internet TV platform operators, such as Shanghai-based BesTV and Wasu Digital in Hangzhou, must submit to SARFT the types, model numbers and suppliers of the set-top boxes they choose to partner with in their license applications, which SARFT will issue through uniform distribution in batch authorizations, with a unique serial number for each qualified internet TV terminal product.
The document also reiterates regulations over content broadcasts using internet TV terminal, stating that, "Internet television content service platforms may only connect to internet television integrated platforms established with approval from SARFT," and "Content providers with television broadcast rights may deliver film and television VOD services through partnerships with Internet TV broadcast and control platform operators" but "may not link such services to their [i.e. the content provider's] websites."
Among the many Chinese internet companies currently partnered with Internet TV broadcast and control platform operator Wasu Digital are Hangzhou-based C2C & B2C e-commerce site Taobao, online game developer and operator Shanda Games (Nasdaq: GAME), Nut Shell Electronics, the Shanda Interactive (Nasdaq: SNDA) subsidiary responsible for the Bambook e-reader, internet giant Baidu (Nasdaq: BIDU), P2P streaming video platform PPLive (PPTV), and online video site LeTV (Leshi) (300104.SZ). Internet TV platform operator BesTV has formed content partnerships with a number of companies, including Taobao and online video site operator Tudou (Nasdaq: TUDO).
With the release of the SARFT document, several online video sites with previously suspended set-top box operations can now expect a new market for their products, needing only a partnership with one of the seven licensed Internet TV broadcast and control platform operators to begin broadcasting video content.
In July this year, SARFT issued the "Memorandum Regarding the Strict Prohibition of Providing Audiovisual Programming Over Internet-Connected Television Set-Top Boxes," which required that online video websites immediately take steps to cease activities including the shutting down of internet TV content service platforms and an end to all related sales and promotional activities.