We already know about the online video regulations co-issued by SARFT and MII, which requires all online video service operated by state owned companies. This was put into effect already on Jan 31st already. As expected, the services of Chinese video sharing websites, all run by private companies, haven't been affected by the new regulations as of yet.
We read about rumors that suggest that the bad news of online video regulation could actually be good news for existing video sharing websites. Today, these rumors came true. In today's press conference (below), the spokesperson from SARFT and MII said that online video services established prior to the new regulations will be allowed to apply for the necessary license to continue operating. What this means is that the regulations will not apply to existing video sharing websites if they apply. However, new sites will have to be state-owned. This actually protects existing video sharing sites by making the barrier to entry impossible for new sites that want to compete.
Here is information on the press conference:
BEIJING, Feb. 3 (Xinhua) — A decision to restrict the broadcasting of Internet videos is beneficial to public interest, a Chinese official said on Sunday. The regulation on Internet video service, approved by the State Administration of Radio, Film and Television and the Ministry of Information Industry, took effect on Jan. 31.
Under the new regulation, websites that offer video programs must obtain government permits. The regulation also clarifies that state capitals should play a leading role in the industry. The move was "conducive to the development of the Internet culture with Chinese characteristics" and was in line with the State Council's measures about the entry of private companies into the cultural industry, the official said.
He said the new regulation aimed to create a clean and healthy on-line environment, especially for the young, and to protect copyrights.
On-line video providers must adopt copyright protection measures. Violators face a fine of up to 30,000 yuan (4,100 U.S. dollars) imposed by local regulators, the regulation said.
Statistics show China now has more than 172 million Internet users who are on-line for at least one hour a week on average, second only to the United States. With the Internet penetration rate reaching 12.3 percent, nearly 70 million computers in the country are connected to the Internet.