LeTV shares dive 10% after set-top box content ruling

LETV shares plunged the daily limit of 10 percent for the second consecutive day yesterday after the State Administration of Press, Publication, Radio, Film and Television ordered online streaming sites to stop providing Internet videos through set-top boxes.

LeTV is said to have distributed its copyrighted content through a number of smart TV set-top boxes such as Wasu and iCNTV.

The affected content was mostly Chinese TV series but also several US series like "24: Live Another Day," "Criminal Minds" and "Modern Family."

LeTV's shares closed at 32.65 yuan (US$5.23) yesterday.

Industry watchers said the moves mean smart TV license operators will have to seek more content while video sites will have to find new profit models.

Luo Lan, researcher with Internet research firm Analysys International, said that copyrighted content on online video websites won't be affected.

Online video sites including LeTV and iQiyi are seeking new distribution channels for online videos and movies. They have turned their attention to set-top boxes to expand beyond personal and tablet computers.

Last month, the administration ordered third-party streaming websites to be removed from Internet TV set-top boxes in an effort to streamline services and prevent illegal content from spreading.

The administration ordered local management authorities in Shanghai and Zhejiang Province to close download links for third-party software on set-top boxes since they offered technical support for "vulgar and pirated programs" to be viewed on TV sets.

The top regulator has stipulated that set-top box operators can only work with licensed Internet TV providers.