Video sharing site fined $42m for copyright infringement

SHENZHEN - Chinese video sharing site QVOD was ordered on Thursday to pay a fine of 260 million yuan ($41.8 million) over copyright infringement.

Shenzhen QVOD Technology Co., Ltd. should pay the fine within 15 days of receiving the administrative punishment or be charged a late fee of 3 percent of the fine for each day, said Fang Canyu, a law enforcement officer with the Shenzhen Market Supervision Administration.

The firm should pay the fine first even though it can apply for an administrative review within 60 days or file a lawsuit within three months, Fang said.

The hefty fine is three times the illegal earnings QVOD made by violating others' information network transmission rights, according to the administrative ruling.

The imposition of hefty fines has proved to be very effective in curbing copyright infringement cases, said Zeng Raodong, head of the laws and regulations department under the Shenzhen Market Supervision Administration.

The punishment was given days after a hearing on June 17.

QVOD streamed 24 films and TV dramas even though it was fully aware or should have known that third-party video websites infringe copyright, Fang said.

The company, founded in 2007, used to offer pirated and pornographic videos with peer-to-peer video streaming technology. Its user base quickly grew to 300 million.

In early April, however, the company shut its QVOD (quasi video on demand) servers after the National Copyright Administration said it, along with Baidu's video service, violated copyrights. Its service has not been resumed.

The Shenzhen-based firm was the latest major online video service provider to fall victim to China's crackdown on intellectual property rights (IPR) infringement.

As the country beefs up IPR protection, its online video industry is bidding farewell to an era of rampant piracy.

Other industry players, including Youku, Sohu Video and Tencent Video, have banned pirated content and purchased copyrights to follow international norms. They use advertising and paid video-on-demand services to cover costs and generate earnings.

In November, the three major players even established an alliance to fight against copyright infringement by Shenzhen QVOD Technology Co. and Baidu's video service, demanding 300 million yuan in compensation.

Shenzhen QVOD Technology even announced that it would invest no less than 100 million yuan ($16 million) on copyright purchases this year.

In late April, Wang Xin, chief executive officer of QVOD Technology Co., said, "Pirated content helped us gain quick expansion. But times have changed and rules have changed. If we wish to survive, we must abide by the rules."