Xunlei, the Chinese video and P2P platform, has officially cancelled its planned US IPO, after initially delaying the floatation earlier this summer. According to Chinese media reports, the cancellation comes on the back of a dire debt crisis in the US and Europe, as well as serious concerns overs Xunlei’s sustainability and exposure to copyright claims from its piracy-packed P2P services.

Although Xunlei has metamorphosed from its origins as an indexer of mostly illegal P2P content, potential investors would surely balk at the fact that not all of the company’s content is yet legit. Xunlei is now pricipally – but not entirely – a video streaming service and social gaming platform, with mostly licensed TV shows and movies, but it’s a minor player in a segment dominated by Youku (NYSE:YOKU) and Tudou (NASDAQ:TUDO). But a lot of its ad revenue still comes from its ongoing P2P apps and services, which are a major liability.

Up to the end of last year, Xunlei made most of its money from online advertising; paid subscriptions are a growing, but still small, part of its revenue:

Revenue sources for Xunlei.com, 2008-2010. (Image source: ichinastock.com)

An expert from Analysis International, Zhang Fan, summarizes Xunlei’s shortfalls as its failure to totally move past its P2P business model, and a lack of quality long-form video content that can pull in a higher calibre of advertiser.

For the sake of nostalgia, check back on our post from early July when Xunlei looked to be raising just over US$100 million from an IPO.

There are still some Chinese IPOs in the lined up for the rest of the year. NASDAQ’s CEO, Robert Griefeld, recently chatted to iChinaStock, and said that are “30-plus Chinese companies in the pipeline.” But the only major tech IPO of all of those is the B2C e-commerce site, Vancl.

[Source: DoNews – article in Chinese]