Joint Action Against Online Video Piracy in China

              Joint Action Against Online Video Piracy in China

Lawsuits Seeking RMB300 Million in Damages Filed Against Baidu and QVOD on
Claims of Spreading Pirated Videos and Engaging in Hotlinking

PR Newswire

BEIJING, Nov. 13, 2013

BEIJING, Nov. 13, 2013 /PRNewswire/ --Youku Tudou, Sohu Video, Tencent Video,
LeTV, MPA, the Motion Picture Association of America (MPAA), CODA, Wanda
Films, Enlight Media, Letv Films announce a joint declaration today in Beijing
to fight online video infringement and piracy both on PC and mobile Internet
in China. Meanwhile, the joint action announces legal action has been taken
against Baidu and QVOD for compensation as high as RMB300 million.

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

Baidu's infringement activities cover four main areas: the PC web, PC desktop
applications, mobile device applications and TV boxes. Four specific Baidu
products 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 authorization
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.

Baidu is also providing access to rogue video sites that host pirated content
and do not have official licensing to operate in China. This behavior 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 unauthorized.

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.

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.

Declaration of Joint Online Video Anti-Piracy Action

Youku Tudou, Sohu Video, Tencent Video, LeTV, Motion Picture Association of
America, Enlight Media, Huayi Brothers, Wanda Films

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.

For media inquiries, please contact:

Youku Tudou Inc
Jean Shao
Director of International Communications

Sohu Group
Xin Jiang
Senior Communications Manager

Bas Li
Public Relations Manager


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