P2P Downloading Frozen in China

In order to protect the copy right and strike a blow at the pirating, the Chinese government surged a movement to renovate the P2P file sharing websites in China.

BitTorrent (BT), a peer-to-peer (P2P) file sharing protocol, is one of the most common protocols for transferring large files. The protocol works as an alternative data distribution method that makes even small computers with low bandwidth capable of participating in large data transfers.

In China, this file sharing pattern is also quite popular. According to the statistical data, the BT downloading accounted for 30% of the whole Internet traffic. There were also a lot famous BT websites in China, enabling many Chinese people to enjoy free movies, music and cartoons through Internet.

However, the prosperous BT downloading in China could be ended forever. On December 7, 2009, BTChina, the largest BT file sharing website in China, published a notice saying: “On receiving the notice from the State Administration of Radio, Film and Television (SARFT), the website will be closed for having no video and audio transferring license. The Ministry of Industry and Information Technology (MIIT) will delete its Internet Content Provider (ICP) prepared number.”

“I received an email from the MIIT, which told me that the ICP prepared number of BTChina was deleted,” said Huang Xiwei, founder of BTChina. He added that the aforementioned email didn’t tell the detailed reasons.

Upon receiving the email, Huang closed the site by himself. “You know, it is illegal to operate a website without ICP prepared number in China.”

This was considered as the start of SARFT’s program to renovate the Internet content providers. By December 12, 2009, more than 200 sites without the video and audio transferring licenses had been closed. According to the insiders from the SARFT, this program would be followed by striking a blow at pirating.

During the process, the closure of BTChina triggered the most debates. As the largest BT website in China, it represented a file sharing pattern based on the Internet users’ voluntary provision of files. These same P2P file sharing patterns had taken most of the Internet video and audio market.

Things happened too quickly. Many people could not get used to it. The government showed its resolution to renovate the Internet content providers and to beat the pirates. But the ordinary people who were used to killing their time by watching the films downloaded from these websites had to be frustrated for they had to find another way to consume their spare time.

In Sweden, the famous BT file sharing website The Pirate Bay was also closed and its founders were fined for their actions. The wikinomics which advocated free file sharing seemed no longer to be applicable.

What Is the License?

It was known that the MIIT deleted the ICP prepared number of BTChina because the SARFT issued to it, declaring BTChina’s having no license of transferring video and audio programs on Internet, as well as the requirement for the MIIT to close the site.

In China, a legal and qualified video website must obtain all the approvals to operate a website. In addition, it must get special license, which is called the License of Transferring Video and Audio, from the SARFT.

It was known that most of BT websites in China didn’t have such a license. “I know it would come sooner or later,” said Huang Xiwei.

The application conditions for this license were stated in the Management Stipulations for the Internet Video and Audio Programs (hereafter the Stipulations) issued by the SARFT and MIIT in December 2007. Its Article 8 read: “The websites applying for providing Internet video and audio services must possess the following conditions: a), it has the qualification of legal representative and must be state-owned or state holding.”

The stipulation on proprietorship meant that most of the websites were illegal when they were founded.

Apart from BTChina, the other video sharing websites, such as Tudou.com, Youku, Koo6, PPLive and PPStream, are all private funded. But they had got the licenses.

“No clear stipulations could be found, but a common view had been formed among the peers: the Stipulations is only applicable for the video sharing websites established after the issuance of the Stipulations. The websites founded before that date could still apply for the license,” said Wang Ran, CEO of China-capital.com

Unlike BTChina, another P2P file sharing website VeryCD seemed to survive. On December 9, 2009 the website could not be normally visited and the reason was said to be the circuit bugs. One day later, the website turned to be normal again. A company named Shanghai Yinzhi Internet Technology Co., Ltd submitted the application for the licenses for VeryCD, which was accepted by the Shanghai Municipal Administration of Culture, Radio, Film and TV.

“For all the file sharing websites in China, the license of transferring video and audio programs online is necessary. Then they must take more measures in fighting against the pirating,” said an insider from the SARFT.

Pirating to Be Blamed

The closure of BTChina was only a small hurdle for the file sharing websites on their ways of development. The bigger problem should be the matters of copy right.

According to the foreign media’s reports, the Swedish court ordered the three founders of The Pirate Bay to delete all the BT seeds (sources for downloading files through BT) before March 1, 2010; otherwise they would be fined 3,000 euros every day.

The problem is how to definite the copy right for these file sharing websites.

In truth, some video websites which advocated closing these P2P websites in the name of protecting copy right were really eyeing on the benefits behind it. In September 2009, an organization named Federation of Anti-pirating of China Online Video was founded by four chargeable video websites. The organizations launched the lawsuits against the free video sharing websites which attributed their actions to the longing for bigger market share.

The free video sharing websites are standing at a crossroad: whether to transform to chargeable ones and then to lose many users or to stick to their original pattern and then to be blamed for pirating?

State-owned Websites Get in

The closure of BTChina reflected another truth – the whole situation of video website is changing.

Even CCTV had set its feet in this field. The online TV from CCTV will be available for the audience quite soon. The news about cooperation between CCTV and Storm Player (a kind of video player) was also usually heard.

By now, most of the online video websites have failed to see profits. They have been longing to change this situation and get more benefits from this market with great potential.

According to the data, the video industry in China saw the revenue of 1 billion yuan (USD 146.47 million), much less than the 20-billion-yuan (USD 2.93 billion) revenue of online games. It was believed the gap will filled in the next five or six years.