China’s leading streaming sites — iQiYi, which is owned by Baidu Inc. (NASDAQ: BIDU), as well as Youku Tudou Inc. (NYSE: YOKU) and Sohu.com Inc. (NASDAQ: SOHU) — will all have to remove the programming. Just last month iQiYi replaced Youku as China’s most popular video streaming site.
From now on, all foreign TV shows will need prior approval before being shown online. This is the same sort of control the government exercises of the country’s broadcast TV stations.
SAPPRFT (love the acronym — sounds like something Bill the Cat would say) routinely sends out orders to China‘s websites to remove “inappropriate content” but apparently this order was unique. The agency typically allows the sites some time to remove the offending content, but in this case the sites were directed to remove the programs immediately. Viewers trying to stream the programs received the following message, according to Offbeat China: “For policy reasons, the service is temporarily unavailable.”
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Baidu, China’s crushingly dominant search engine, has already said that it expects no profit growth in 2014 as it ramps up spending to promote its mobile services. Revenues were up 50% year-over-year in 2013, but Baidu has seen the mobile handwriting on the Chinese wall. It also faces a challenge from gaming and messaging giant Tencent, which acquired a minority stake in competing search engine Sogou last year.
Shares of Baidu are up about 91% over the past 12 months, but they have dropped nearly 10% since reporting 2013 fiscal year earnings in late February. The stock was up about 0.1% in premarket trading Monday, at $163.00 in a 52-week range of $84.45 to $189.34.
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