Genuine Copyright Dilemma for Video Sharing Websites

Issue 30 By Zhou Yi, China IP,[Copyright]

In January 2009, Joy.cn joined with 79 copyright holders, such as Beijing Polybona Film Distribution, Beijing Orange Sky Entertainment Group, J.A. Media, SFS Emperor and Shanghai Inlook Media, to establish an “Anti-Piracy Alliance” and launched a legal battle against Tudou.com for copyright infringement.


In February 2009 alone, Tudou.com faced 14 copyright lawsuits. While in June, Tudou.com was also sued by five companies including Shanghai Yuancun Movie Co, Ltd. Of course, Tudou.com was not the only video sharing website facing copyright lawsuits. Youku.com, Ku6.com and other large websites were also involved in lawsuits. Ku6.com even set aside a special budget to serve as “litigation funds.”
In addition to copyright lawsuits, a great volume of work for video websites involves helping copyright holders to remove links to videos not copyrighted, a practice deemed as a practical application of “Safe Harbor Doctrine”.


Undisputedly, uncopyrighted videos are still on the video sharing websites, whether the websites are legally liable or not.


Xiao Hu’s discovery


“Is this Prison Break pirated?” asked Xiao Hu, an online video lover working for a games website, as he pointed at the computer screen. On the screen a video clip about the popular American TV series Prison Break was being played. Then he asked the journalist, “Are the Japanese cartoon animations shown on the Cartoon Channel pirated?”


Xiao Hu said that he loved to visit video sharing websites to view movies and TV shows. However, he felt that he had found fewer newly released movies or TV shows for the past year or so, and especially he was impressed by the “difficulty in finding homegrown movies.”


He made a demonstrative search under the gaze of this journalist. He searched Tudou.com and Youku.com for City of Life and Death, however, the returned results disappointed him, because the two websites did not have the City of Life and Death which was released on April 22. And a search for Silver Medalist, which was released on January 7, returned no results at all. 


 “It is quite uninteresting for Youku.com and Tudou.com. The movies are only preview trailers. Homegrown movies, especially the popular ones, are very difficult to be found. However, some foreign movies can be found,” said Xiao Hu.
Then he searched for the two newly released foreign movies, one is the Night at the Museum 2 (releases on May 22) and Terminator Salvation (released on June 9) and he got results accordingly. Though they are “TS versions”, they are complete for viewing.


 “As a matter of fact, if you wish, you can find many movies and TV shows, foreign movies, in particular, can be easily found,” Xiao Hu said. Then he searched for movies Transformers and TV show Lost and got favorable results.


“Nowadays both Tudou.com and Youku.com have begun to sell movies and TV shows, it is convenient, especially for some TV shows. Such as My Youthfulness, I just viewed this TV show on Youku.com. Though I don’t understand (what copyright means), I think some shows, such as Transformer, is it genuine? Prison Break is absolutely not.” Xiao Hu said finally in an affirmative manner.


Subtle balancing with copyright owners


“2005 was quite a year for video websites piracy! At that time video websites had movies immediately after their releases,” Yao Xiaoning, copyright sales manager of Beijing Polybona Film Distribution, said emotionally. “In 2006, video sharing websites began to emerge. Two years later, they had done tremendous harm to our copyright. Since the “Safe Harbor Doctrine” had in some way protected such websites and they treaded marginally on legal matters and were not easy to bear legal liabilities.”


In 2003, Polybona began to have copyright cooperation with video websites. As for its attitude towards video websites, Polybona has from the very beginning taken an active attitude in the cooperation. Ms. Yao said the emergence of video websites is a historical trend and a new market as well. As a copyright holder, Polybona shall not, first of all, run against the historical trend and secondly shall not give up each market. “I remember in 2005 Jeboo.com decided to use genuine materials and purchase online broadcasting rights of The Promise. It was a hot issue at that time. Then the next February we began to cooperate with the website,” said Yao.
Polybona also took an active attitude towards video sharing websites. Yao Xiaoning said they have cooperation with all the video sharing websites, mainly over provision of promoting movie trailers to the websites. After 30 days of the premiere of a movie, the websites may cooperate with Polybona to purchase the online broadcasting rights.


Since last year, the number of video sharing websites which are willing to cooperate with Polybona and purchase copyrighted materials has increased with a stable flow of fees, however, the average profits derived from online broadcasting rights of a movie is  1/10,000 of the movie’s office box revenues.


“However, if their websites have piracy, then the costs incurred will not be less than  1/10,000,” said Yao.


Therefore, when Polybona releases a new movie, the prominent task is to prevent piracy. Before the premiere of the movie, Yao Xiaoning will notify, via telephone or email, video sharing websites and request their cooperation to do some technical blockings and voluntarily delete some unauthorized links. While during the show of the movie, Polybona will entrust some technology companies to keep monitoring. Once some unauthorized links are found, Polybona will notify them to delete them.  
 “Two or three years ago, we were very nervous seven days before the premiere of a movie. We had to communicate on a level-by-level basis. Therefore, it would be very troublesome if the date of premiere fell on holidays. After years of continuous cooperation and with their rising awareness of copyright, things are going better now. Moreover, they react very promptly and may delete unauthorized links within an hour or two,” said Yao Xiaoning.


Yao Xiaoning said currently Polybona is able to avoid piracy of its movies or long-term existence on video sharing websites. However, prevention is highly necessary. Besides, we need to have a good communication or cooperation with video sharing websites, particularly some large video websites.


Similarly, Beijing Netmovie Co., Ltd., China’s largest digital media content provider, is also undergoing a process to seek balance between video sharing websites.
Zhang Lei, senior sales manager of the company’s program production center, told the journalist, “We are, from the very outset, a company specializing in new media copyright. Video sharing websites are actually our clients, and they will purchase our copyrighted products. Generally all the video sharing websites within our sight are our clients.”


Since 2008, Zhang Lei has greatly felt the potential for the genuine materials market because a number of websites are willing to purchase their copyrighted products. As a result, the number of purchases increased by 30% over 2007. Despite the impact of the financial crisis, they believed that this year’s sales will not be less than those of last year.


Even with cooperation, there are occurrences of piracy or infringement on video sharing websites from time to time. And Beijing Netmovie has to seek another balance with these clients: specialized monitor departments will view these large websites every day, search with key words for videos containing infringing materials. When an infringing video is found, a cease and desist letter will be sent to the website demanding withdrawal of the video. If several rounds of letters fail to work, then we have to bring it to the court. “Our practices also involve a great risk since they are our clients. Actually we only wish everyone could form a good habit,” said Zhang Lei. “Sometimes, we feel very helpless. However, since we engage in such a sector and we have promising expectations for this market. Besides, the change of their cooperation is obvious.” 


Portals’ view on sharing transformation risks


Joy.cn has kept a low profile before the initiation of “Anti-Piracy Alliance” against Tudou.com. Since 2005, Joy.cn, adhering to its ideal of a “video information website” and only using genuine video materials, was not well-known. The high profile showing, said Zhang He, president of Joy.cn, is “because nobody noticed you as we dealt in copyrighted contents in 2008. Things are different this year. All the trends show that dealing with copyrighted contents is the only way out for video sharing websites.”


However, Zhang He emphasized repeatedly that they are all video websites, but they are not a video sharing website. Since the contents of Joy.cn mainly cover video information or authorized movies and TV shows uploaded by the website. For the past several years, there was pressure when they found that the sharp increase of traffic of video sharing websites due to some pirated videos, such as Prison Break. However, Joy.cn was not impressed. While in 2009, each video sharing website has begun to deal with genuine materials, Zhang He thought that the transformation is necessary but will not be that easy.


“A typical example is Prison Break which has brought much online traffic for the websites. However, if the website decides to use genuine videos and delete such TV shows, the visitors who came for such videos will leave, and the online traffic will drop accordingly. Therefore, I think piracy only brings untrue traffic. Resolute courage is needed for the use of genuine materials. Otherwise it shall not be deemed as a complete use of genuine materials. This is just like drugs. You know it is not right, but if you want to give it up, it will torment you. We had pressure over traffic and were tempted by such videos, therefore, we know what it is like,” said Zhang He.


“Besides, I think piracy, especially piracy over foreign movies and TV shows, is a loose rein by copyright holders. If someday they wish to rein in, the result would be horrible. Although it is very difficult to fight pirated disks, the number of video websites is countable. If the right holders want to deal with these videos, there will be great risk on the part of the websites,” said Zhang He.


(Translated by Wang Hongjun)

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