Youku says its online videos are legal

NASDAQ-listed Youku Tudou Inc, China's leading online video site, told the Global Times Thursday that it has legal rights to all movies and TV dramas that are broadcast on its platforms, in response to a copyright infringement lawsuit filed by domestic rival Xunlei.

Wang Shanna, deputy president of Xunlei, told the Global Times on Thursday that the company had filed lawsuits against Youku on January 25 in Haidian District People's Court in Beijing, for violating exclusive online copyrights to 13 domestic movies and TV dramas.

Xunlei alleged that Youku had broadcast pirated versions of the content on its websites and other domestic Internet platforms for digital media like douban.com, making Xunlei unable to resell their exclusive online copyrights.

"We have legal rights, including the authorization to broadcast on Douban, to all 13 movies and TV dramas that are in question. We believe the court will make a just and fair decision," Shao Dan, director of international communications at Youku Tudou, told the Global Times on Thursday.

"Competitors sometimes use so-called copyright complaints to market themselves," Shao said.

The suit has not yet been accepted by the court and their decision is expected after the Spring Festival holidays, said Wang, who noted that Xunlei has won similar cases in the past and hopes to claim nearly 1 million yuan ($160,400) in compensation from this one, with sums ranging from 50,000 to 250,000 yuan for each title.

In previous court decisions for similar cases in China, average infringement compensation has been around 10,000 yuan, Wang Guohua, a copyright infringement lawyer with the Beijing-based Zhong­wen Law Firm, told the Global Times on Thursday.

Li Yan, an industry analyst with Beijing-based consultancy imeigu.com, said that not much pirated content can currently be found on domestic online video sites, given that the players are paying increasing attention to protecting their exclusive online broadcast rights and are launching many copyright complaints at each other.

Exclusive online rights to movies and TV dramas may allow a site to attract viewers from its rivals and increase traffic, which determines the advertising income that accounts for more than 90 percent of video sites' revenues, Li told the Global Times on Thursday. Li also said the high cost of copyrights makes it impossible to make a profit in the sector.

Youku's content costs in the third quarter of 2012 were 182 million yuan, representing 28 percent of its net revenues compared with 26 percent over the same period of 2011.

Domestic online media firm Sohu.com Inc announced Monday that the company spent $60 million buying content for 2012 and planned to increase that figure in 2013 to somewhere between $70 million and $80 million.