China: China's Online Video Providers struck by PRC Copyright Enforcement and a shifting Market are forced to transform.

Last Updated: 30 January 2011
Article by Richard Wigley

Hollywood and Hong Kong film studios have long struggled to monetize their content in China. Though revenues from traditional movie theaters are growing rapidly, the real action may be found in the online market, where Chinese youth prefer to obtain their entertainment (i.e. film and television programming). How then can a content owner best take advantage of this rapid movement to online viewing in today's China?

China has a well-established legal regime for enforcing copyright, but online infringement rates in the P.R.C. have been high since the advent of the Internet. Online copyright violations "made up about 50 percent of all copyright cases in 2009" in the P.R.C.1 While a natural reaction would be for the content owners to bring legal action against infringers, it can be seen from the experience of media companies in their court battles against unauthorized downloads of music in China, intellectual property ("IP") enforcement action, in and of itself, would not likely provide substantial opportunities to monetize content. Thankfully, for content owners, IP enforcement efforts in China are being nicely complemented by the best solution of all----market forces.

Recent efforts by the National Copyright Administration ("NCA") to identify and, if necessary, punish online copyright infringers related to pirated video works have shown the potential for meaningful results, with a number of links to pirated works already having been deleted. 2 The ongoing program targets the top 18 Chinese video websites and will "review and supervise the legitimacy of the 50 most viewed films and the 50 most viewed TV series on each major website".3 The NCA highlights its efforts in combating online piracy, citing, specifically, its efforts in having pirated content removed and, if necessary, to take efforts to suspend operations of infringing websites.4

While the above action by the NCA is laudable and it proves that the NCA is a useful ally in the fight against online piracy, market forces are actually playing a very significant role in moving the online video world in China towards legitimacy. For instance, the NCA cites the fact that "70 percent of Korean TV dramas ... have had authorization from the copyright owners".5 In a world where online piracy rates exceed 80%, why would Korean TV dramas prove the exception? The answer may be that, in addition to improved copyright enforcement, major providers of online video in China have embraced legitimate licensing of content as a viable business model. Popular Chinese online video site,, has signed licensing deals with Korean televisions stations which, as per, make it "China's largest platform for Korean television shows, which are enormously popular with China's online video viewers".6 The reason that only 30% of Korean TV programs are pirated online has, no doubt, something to do with the efforts of Chinese governmental agencies, such as the NCA, in improving copyright enforcement on the Internet and, equally if not more importantly, to Chinese online video providers embracing the licensing and subsequent distribution of content as a viable business model.

It has been estimated by iResearch that the market for advertising alone on online video websites in China was "approximately $346 million [in 2010], up from $83 million in 2008".7 It is clear that the online video market in China is now a viable business proposition and offers great potential for the future. Beyond today's model for monetization of online video in China, which is largely based on advertising revenues, there is a new and potentially huge market for paid downloads/streams of desirable content. In December of 2010, began streaming the movie, "Inception", at a cost to users of 50 RMB (approximately 75 U.S. cents), based upon a licensing deal between and Warner Bros. 8 Online ad revenues and, now, revenues from downloads, provide good news to content owners, as the profit potential of the online movie and television market in China may finally be realized by not just overseas media companies from Hollywood, Hong Kong, and Korea, but also by media companies in mainland China.

Sites focused on online video, such as the afore-mentioned and others, such as, are among the most visited websites in the world. Online web traffic website,, lists as the 48th most popular website in the world, 9 followed by in 51st place .10 recently went public with an IPO and has a market cap of over $3 billion ,11 while has filed for an IPO of its own .12 There is clearly a belief in some circles that great deal of shareholder value can be created by offering legitimate online videos in China and companies such as and hope to benefit from the 'first mover" advantage.

As noted by Loretta Chao in her Wall Street Journal article on the online video market in China, "Youku and Tudou have acknowledged that users have posted pirated content on their websites and said they would work with copyright owners to remove such material and obtain licenses for legitimate programming" .13 Websites such as and now have an even greater vested interest in the protection of the IP rights of video works on their sites, as they are now actually producing their own content for distribution. 14In a recent New York Times article, David Barboza notes that "Anita Huang, a spokeswoman for Tudou, based in Shanghai, says that the company is positioning itself as a Chinese version of HBO".15 Just as major media companies such as HBO aggressively seek protection of their IP rights, we may expect much the same in next-generation media companies, such as and

The efforts by the NCA to monitor the legitimacy of video content on the Internet will be of great help in reducing online piracy and it is good to see that its efforts are already producing positive results. The marketplace and the P.R.C. legal regime are sending clear messages to online video providers ----- the future of online video in the P.R.C. is with legitimate, licensed content and that future may be very profitable indeed.

1. Qiu Bo, China Daily, "Blacklist system to monitor online video copyright", January 29, 2011, page 3.

2. Ibid

3. Ibid

4. Ibid

5. Ibid

6., "Youku Launches Partnership Plan 3.0: Latest phase of strategic plan promotes healthy development of online video copyright market, April 8, 2010, found at (last visited January 30, 2011).

7. David Barboza, New York Times, "Booming Demand for TV on the Internet in China", July 18, 2010, found at (last visited January 30, 2011).

8. Loretta Chao, Wall Street Journal Online, "China's Youku Goes Hollywood", January 6, 2011, found at (last visited on January 30, 2011).

9., Site information for, found at (last visited on January 30, 2011).

10., Site information for, found at (last visited on January 30, 2011).

11. Yahoo, Yahoo Finance, Inc. American Depository, January 20, 20110, found at (last visited on January 30, 2011).

12. Loretta Chao, Wall Street Journal Online, "China Video Site Tudou Files for IPO", November 9, 2010, found at (last visited on January 30, 2011).

13. Supra at 8.

14. Supra at 7.

15. Ibid.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.