Lawsuits against Sohu threaten China's Anti-Piracy Alliance

Two months after leading online video operator Youku.com began lawsuits against Sohu, further suits have been filed against the portal by companies such as state-owned broadcaster CCTV, Xunlei and Wangshang (NetMovie.com). The suits, thought to be related to copyright infringement, have raised questions about the future of the Chinese Online Video Anti-Piracy Alliance, a Sohu-led group of 110 online video companies and external firms set up in September to combat video piracy in China

The five companies responsible for the suits filed their claims on Tuesday in the Haidian District Court.

The suits launched by Youku in September included two for copyright infringement and one for defamation, said Dele Liu, CFO and senior vice-president of Youku. Both are ongoing. The defamation suit was launched after the Anti-Piracy Alliance announced its intention to file infringement grievances against Youku, as well as Pepsi and Coca-Cola for having advertised on unlicensed Youku videos. Youku’s suit was filed in a pre-emptive measure before the alliance acted on its claims.

At the time, a Youku spokesperson claimed: “This idea of an ‘alliance’ exists mostly in the heads of Sohu. As far as we can tell, Sohu is flying solo,” adding: “[Sohu] is currently trying to promote its own video service, and so it is going after the industry leader in what amounts to a shameless publicity stunt”.

Sources said that the alliance eventually filed 48 suits against alleged infringers.

However, there is now speculation as to whether the alliance can succeed - not least because NetMovie, one of the companies suing Sohu, is a fellow member of the alliance.

The alliance is additionally thought to be dropping its claim against Coca-Cola.

Youku's Liu argues that the alliance cannot last. “It’s under so much scrutiny and pressure that it’s ineffective. I don’t see it having any credibility.”

The events surrounding the alliance’s court proceedings beg the question of whether such an industry-led governing body can exist in China. According to Dave Carini, analyst at Maverick China Research, China is a difficult market to police because of the sheer number of sites that get away with broadcasting pirated content.

“I think it's difficult right now for an industry-led governing body to exert the kind of influence that the Chinese Online Video Anti-Piracy Alliance aimed to have in China,” Carini said. “All of China's major online video sites host content without permission. Only after the major online video sites are actually respecting each other's rights will an industry body… be able to function effectively.”

Kenny Bloom, CEO VisiTek Holdings, further suggested a watchdog group could not work without Government backing and supervision.

“In order to make a group like this viable, you need co-operation from all the video sites out there, not just a few who are looking to pick on others. You also need a Government office to police this, and you’ll need initiatives from the content providers. Here, we’re only seeing video sites – it’s the providers who are really in a position to lose here, and they’re not even part of this alliance."

Bloom added: “This is obviously wayward because you have CCTV suing these guys – that’s a Government entity, so these guys don’t even have the support from the people they need to go forward.”

CCTV and Sohu worked together last year to air coverage of the Beijing Olympic games online.

Representatives from Sohu did not respond to emails or telephone calls before Media went to press.