Police have investigated about 750 cases and confiscated 830,000 sets of illegal equipment and software worth more than 320 million yuan (USD 49.1 million).
The 422 people were detained following an order jointly issued in September by the Supreme People's Court, the Supreme People's Procuratorate, the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) that pledged punishment on illegal TV businesses.
Other than state-run CCTV channels, foreign channels are banned in China. Many foreigners working in the country try to access foreign channels through internet devices.
Illegal online TV and video services are a new area of crime requiring high technical skills, Shenzhen public security bureau's Cai Chengrong state-run Global Times reported.
Police said pornography was a major draw for customers of these illegal services. People who bought the receivers had access to more than 3,000 pornographic links uploaded by Zhou from three servers based in the US.
Another illegal TV service operator called "Taiwan Chinese Satellite Television" provided all-day pornographic programming.
Police in East China's Fujian Province have arrested 33 people involved in the operations, including its Chinese mainland business head, wholesalers and retailers, the Global Times report said.
According to the SAPPRFT of the People's Republic of China, a compulsory national standard on receivers for online TV services is expected to be published by the end of July.