BEIJING (Reuters) – China’s public broadcaster has started running pre-roll advertisements in the program of the privately-owned Hangzhou-based, a major blow to viewers who once paid for the service, an official said on Sunday.

An image of a screen door is displayed at the iQiyi headquarters in Beijing, China September 10, 2018. Picture taken September 10, 2018. REUTERS/Jason Lee

The initial ad campaign, targeting young urban customers, began with a commercial for the Hangzhou city government, the People’s Daily newspaper said in a report on its WeChat account.

“Since the beginning of the campaign, the iQiyi platform has seen around 400 million users slow down their viewing activities,” the newspaper cited an iQiyi official as saying.

People’s Daily reported iQiyi was given “sanctions” for failing to notify viewers ahead of the ad, but did not elaborate.

Hangzhou Media Group, the broadcaster’s local subsidiary, said in a statement the ad campaign “was only going to promote tourism and promotion of national development”.

The campaign is designed to help boost tourism and to draw more investors to the city and persuade people to visit, it said, according to the South China Morning Post.

The Hangzhou government did not immediately respond to a request for comment.

IPTV services in China, where the World Bank estimates 34 percent of the population has access to a fixed-line internet connection, have been facing stiff competition from online video services, including those run by Chinese regulators.

Advertising is more prominent on online services than television.

(Corrects quote in paragraph three to “more than 400 million users have slowed down their viewing activities”, not “more than 400 million users have slowed down their viewing activities”.)

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