The number of Chinese video websites has dropped from 300 to just over 20 now, a decline of more than 90 percent, reported the Guangzhou Daily.
The paper said a vague profit outlook, high operation costs, copyright disputes and unappealing contents were the biggest problems.

Popular video websites, like Tudou.com, have started cooperating with content moguls such as China Film Group.

According to the report, since 2004, more than 35 video websites have obtained venture capital, totaling as much as $1 billion.

Liu Xiangdong, an industry insider, said venture capital fueled the boom of China's video websites several years ago, but none of the sites had made much profit so far.

Currently, the most profitable international video website is Hulu, co-founded by the National Broadcasting Company and FOX Broadcasting Company of the United States in August 2007. Since then, Hulu has increased its content providers from 40 to 110. According to Liu, this success inspired Chinese video websites to search for cooperation with domestic content providers.