The global status and operational success of Google's YouTube has spurred the establishment of more than 200 websites in China to provide Web 2.0-based audio/video services, but many of them have closed down operations and others have cut personnel due to operational problems.

The technical and financial thresholds for setting up a website like YouTube are not high, but the subsequent needs of installing broadband servers to process uploaded audio/video content as well as advertising to build up brand recognition incur heavy investment costs which is financially unbearable to many operators.

Among the relatively large websites in China, Dusee, NuCom, Rox and UUMe have downsized their staff to reduce operating costs, the sources indicated. The China market, having a large growth potential, could be able to sustain five to six audio/video sharing websites similar to YouTube.