Chinese content coalition sues Baidu
November 14, 2013
By Colin Mann
A coalition of content interests in China comprising Youku Tudou, Sohu Video, Tencent Video, LeTV, MPA, the Motion Picture Association of America (MPAA), CODA, Wanda Films, Enlight Media and Letv Films have issued a joint declaration (see below) to fight online video infringement and piracy both on PC and mobile Internet in China. Meanwhile, the joint action has revealed that legal action has been taken against Baidu and QVOD for compensation as high as RMB300 million (€36.6m).
Representatives from more than a dozen Chinese and international film and television production companies attended the joint action announcement in Beijing. International attendees included the Motion Picture Association of America, Sony Pictures Entertainment, Warner Brothers, Disney and Paramount. Chinese attendees included the Capital Copyright Industry Alliance Capital Protection Division, the China Radio and Television Association of the Television Production Committee, and many Chinese production companies.
“Since 2009, the video industry is facing a more severe anti-piracy situation,” Sohu Group Chairman and CEO Charles Zhang said. “Especially when those big Internet companies with resource advantages participate in large-scale piracy. We cannot keep competing because where thieves and robbers are having their way, law-abiding companies cannot survive. We may even have to exit online video industry if such practices continue. Nobody will invest in content, and China’s online video industry will face the sad situation as the music industry, which has already been destroyed by piracy, had faced before. The video industry now has walked to crossroad. If to let such industry malpractices continue, it would be a devastating blow to the core of the copyright and creative industries.”
“At present, mainstream video sites through healthy competition and collaboration have established a stable ecosystem, including government regulators, investors, production teams, other interested parties, advertisers, users, etc.,”Youku Tudou Chairman and CEO Victor Koo said. “Among them, the respect of intellectual property and copyright has been a virtuous cycle to maintain the core of this ecosystem, especially in the mobile Internet era. We hope more people can join in, and together, with government, authorities and copyright holders to strengthen cooperation, enhance technical measures, fight against hotlink, combat piracy, and jointly promote the process of genuine network.”
“To be able to provide high quality content to the end user, major legitimate video sites have made a huge investment, and respecting copyright is one of the most important investments,” said SY Lau, Senior Executive Vice President of Tencent and President of its Online Media Group. “Any investment to circumvent copyright and other content shortcuts cannot be accepted as legal and ethical. For infringement, Tencent Video has completed the bulk of notary acts of hotlinking evidence, filed lawsuits against QVOD and will retain rights to take legal actions against Baidu (Video).”
“Such Internet crime is low cost and secretive,” Liu Hong, LeTV COO and shareholder of LeVision Pictures, said. “Infringement online is showing explosive growth. On search engines, you will find the first few ranked pages are sites containing pirated material. Infringement and piracy to the copyright holder causes significant damage. Since the second half of 2010, LeTV has found evidence of 650 copyright violations by QVOC and evidence of more than 800 infringement violations from Baidu’s Yingyin.”
“A large number of Chinese and foreign films and television productions are distributed on rogue video sites that are easily built using light content management systems,” Wei Feng, China president of the Motion Picture Association of America, said. “We must increase efforts to stop companies from infringing copyrighted material and to pay for the damages for the loss of copyright.”
Baidu’s alleged infringement activities cover four main areas: the PC web, PC desktop applications, mobile device applications and TV boxes. Four specific Baidu products alleged to be responsible for the distribution of and/or access to pirated content include: Baidu video search, Baidu Yingyin, Baidu Video App and Baidu TV Stick. Via these products, Baidu is distributing content without authorisation while engaging in activities that are beyond the scope of a search engine.
Via hotlinks, users are able to access content hosted on third party sites. Such content can be viewed using Baidu video applications while Baidu takes advantage of licensed content, storage and bandwidth of third party video sites. Additionally, users are able to access the content without ever having to visit the website of the online video site, which ultimately hurts the operations of online video companies who have legally procured content. Normal searches should provide a link and then take users to a third party site. “Yet Baidu video search pages directly host and play video content, which is a serious violation of the rights of video sites,” says the coalition.
It says that Baidu is also providing access to rogue video sites that host pirated content and do not have official licensing to operate in China. This behaviour is generating revenue and traffic to illegal online video operations. Baidu is also profiting from advertising revenue sharing agreements with such sites. The illegal video sites, built using turn-key content management system solutions, can host hundreds of thousands of movies and television programs, which can be viewed on Baidu Yingyin. Much of the content is unauthorised.
According to the coalition, Baidu’s infringement is worse on the mobile Internet. In August 2011, Baidu launched its Baidu Video App for mobile devices. On Sept. 9, 2013, Baidu announced that active users of the app surpassed 100 million with more than 20 million daily active users. They claimed to have aggregated more than 350,000 movies, TV shows and other content for the Baidu Video App. Baidu’s copyrighted material is only a tenth of what is available on the app.
In China, the mobile Internet industry is booming. In 2013, China’s mobile Internet market will reach 648 million users. The development of mobile video is growing at an even greater pace. For many of China’s major video sites, more than 40 percent of traffic comes from mobile devices. Baidu’s engagement with hotlinking and piracy on the mobile side is destroying other video sites. The harm is far greater than during the PC Internet era. If not promptly checked, the emerging mobile video industry ecosystem will be devastated, the coalition warns.
In the second half of 2013, police in Beijing’s Haidian district closed down more than a dozen light CSM and QVOD sites based on tips. Evidence indicated that most of the sites were illegal without proper licensing to operate online video sites. They received traffic distributed from Baidu video, and share the ad revenue via Baidu advertising networks.
Responding to the action Baidu said that it had always attached “great importance” to copyright protection in the video industry, pointing out that since the beginning of last year, it had taken many measures against piracy, including an automatic screening system to eliminate pirated videos, a platform to receive complaints about piracy and refusing to recommend pirated videos to users. The Baidu Video site (v.baidu.com) is the largest platform for video websites with copyrights and contributes to 75 percent of the industry’s search traffic, the company said.
Declaration of Joint Online Video Anti-Piracy Action
Internet and mobile Internet video piracy remains rampant in China. We call on the video industry, the copyright holders and film and television practitioners to work together to fight such piracy. We strongly urge Baidu, QVOD and other companies to respect the work of video industry practitioners, and, as Internet industry leaders, to commit to corporate social responsibility to stop piracy that results in unfair competition. We also call on the relevant administrative departments and industry associations to address the ongoing online and mobile Internet piracy situation, to maintain the normal order of competition in the industry, and to combat infringement, piracy and other acts of unfair competition. Finally we urge consumers of Internet and mobile Internet content and all other interested parties to attach importance to the value of intellectual property rights and consciously resist watching the allegedly infringing video program or downloading an application that provides access to pirated content. When all interested parties respect the intellectual property rights of content available via the Internet and mobile Internet, viewers will have better access to quality films, television programs and other content.