Date
19 August 2017
Commercial OTT TV operators like LeTV have to cooperate with at least one of the licensed broadcasters to provide content to audiences. Photo: huanqiu.com
Commercial OTT TV operators like LeTV have to cooperate with at least one of the licensed broadcasters to provide content to audiences. Photo: huanqiu.com

LeTV shares trading suspended amid tightened censorship

Internet TV platform LeTV (300104.CN) said trading in its A shares was suspended Friday morning after the stock dropped by its daily limit for the second day, according to the company’s regulatory filing.

The State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) in the past month launched a series of actions to reiterate its policy that commercial websites are not allowed to directly provide content to internet TV users through over-the-top (OTT) devices.

The SAPPRFT has been investigating an internet company that seriously violated the regulatory rules, according to one of the SAPPRFT’s statements.

LeTV on Friday denied media reports that LeTV is the company being referred to in the SAPPRFT statement. It also dismissed rumors that the regulator had verbally informed all internet broadcasting license holders to immediately stop cooperation with LeTV.

In China, only licensed broadcasters are allowed to feed content to internet TV devices. So far only seven government-backed firms including CNTV, Wasu Media and Hunan Television hold such licenses.

Generally, commercial OTT TV operators like LeTV have to cooperate with at least one of the seven firms to provide content to audiences. Without such links, their OTT boxes will be useless.

The company has admitted irregularities, but noted that license holders will continue their cooperation with LeTV after rectification is done.

“The tightened regulation, in the long run, will not change LeTV’s business model, and will benefit companies providing copyrighted content,” it said in the filing. 

“The market never truly attached importance to the regulators’ influence in the industry [because, for a considerable time, the regulators are ambiguous when it comes to irregularities]. But now, LeTV’s case indirectly warned [the market of] the huge impact it can bring”, the 21st Century Business Herald reported Friday, citing an unidentified source close to the company.

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EJ Insight reporter

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