It seems peer to peer companies in China are making big money, both by way of venture capital investments, and an increasingly profitable amount of advertising dollars.

One current example is Chinese P2P company Xunlei (a P2P download manager - the Chinese equivalent of Vuze) is in talks with US venture capital companies to raise a final round of $100 million. This would add to the $30 million it has already raised, including $5 million from Google.

Advertising & Traffic Upturn

According to iResearch, PPLive and PPStream, two Chinese companies that stream TV using P2P technology, are also seeing an upturn, with advertisers increasingly signing deals with the sites, which goes hand in hand with millions of users watching video streams on the sites.

PPLive is the current market leader in terms of traffic, with 24 million active users in May. PPStream, QQLive, UUSee and Tudou also manage millions of monthly users.

To put it in perspective PPLive has generated ($3.4 million) in revenue in the first half of this year with similar Chinese P2P companies seeing similar success.

These Chinese companies are still successful despite the sites suffering from copyright infringement lawsuits. However, as discussed by NewTeeVee the fines imposed in China are only a fraction compared to the US.

While U.S copyright violation fines are reaching record breaking levels, the aggresive arm of the MPAA and similar organisations are not as mighty in China with Chinese courts often siding against rights holders.

Chinese Censorship a Problem?

Unfortunately Chinese censorship creates the real threat of Chinese web TV companies being closed down by the Chinese authorities. 56.com, dubbed the YouTube of China, was rumoured to have been shut down by Chinese authorities after the site went down last month

It is beleived that the success of the Chinese P2P companies is partly due to a concentration on safe TV content, rather than user-generated content, which keeps the Chinese government happy.

The Likes of the MPAA Pushing P2P Technology Abroad?

In the U.S content rights holders are frequently uneasy about the use of the internet as a medium for their content and are often quicker to jump down the lawsuit route rather than looking at how they can embrace a new technology to serve their own visitors.

While rare, examples of this technology being used successfully by rights holders do exist. The BBC iPlayer in the UK is a great but rare example that this technology can be embraced by traditional TV companies.

While in China emerging P2P companies are flourishing, those in the U.S struggle to find backing from investors, advertisers and content rights holders. Joost is scaling back, Vuze (previously known as Azureus) is getting blocked by ISPs and emerging California based TVUplayer remains unheard of in the business world despite serving peer-to-peer TV to 12 million uses.

The threat of those massive lawsuits and ISP problems is making everyone uneasy about working with P2P companies in the U.S and the rights holder and TV networks are reluctant to get on board.

China to Drive a P2P Revolution?

If the trend continues it could be argued that China will lead the way for a P2P revolution where the Chinese will be able to get the TV content they want the way they want it, without being subject to unfair usage restrictions and heavy advertising.

In the meantime uneasy rights holders will continue to fight a losing battle and reign in lawsuits on serious U.S based P2P and Internet TV companies and refuse to adopt the emerging technology themselves while piracy flourishes like never before.

Hopefully the Chinese will be able to prove that this method of TV distribution is viable, is profitable and is in the interest of both the rights holders and consumers.

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