A man identified only by his surname Xing and his female counterpart, known only by her surname Hu, own the site, which was not identified by name.
Police said more than 300 people around China had been recruited by Xing and Hu to participate in the operation of the site as performers. A number of the performers also worked for similar sites, according to police, who said they had fined and arrested many of the people involved.
“They thought it was safer to perform at home in front of their web camera rather than working for some illegal night club," prosecutor Huang Zheng said.
The couple charged between $1 and $3 for each performance, according to police, who said shows ranged from mere nudity to sexual acts.
The couple took 55 percent of the site’s revenue, sharing the remaining 45 percent with its performers.
Xing told police the site earned nearly $400 per day from visitors both within China and around the world.
To use the site, members had to pay via an online banking system.
Authorities first became aware of the site after a local woman reported to police that her husband had spent $381 watching porn on the site.
On the day police arrested Xing and Hu, they found more than 200 members watching live shows on the site.
Xing and Hu, who launched the site in July, told police that they had spent more than $25,000 on software, Internet services and office space to fund the illicit venture.