China’s two biggest online video site operators, New York Stock Exchange-listed Youku and Tudou, are locked in a bitter court battle, with each accusing the other of pirating their licensed video content.
Tudou alleges that Youku pirated episodes of TV skein, “Kangxi is Coming,” to which it owns exclusive online broadcast rights, and says Youku also provided links to the pirated content after Tudou asked for it to be taken down.
“Youku think they can live on free traffic without paying for the content and they are trying to hide the fact that they are actually not as competitive as they pretend to be,” Tudou CEO Gary Wang said in a statement.
For its part, Youku accuses Tudou of violating its intellectual property rights on more than 60 TV series, including “Wu Zetian: The Untold Story” and “The Emperor’s Harem.” It sent a statement with screen shots of the pirated content and said it had filed evidence with a Shanghai court.
“Since Tudou has repeatedly failed to remove the mountain of stolen intellectual property posted on their site while attempting to smear Youku in the press, Youku now has no choice but to pursue legal action. We stand firm in our principles and will defend our intellectual property against theft from all competitors.,” Youku spokesman Jean Shao said in an equally combative statement.
In August, Youku struck a deal with DreamWorks Animation for online distribution of the “Kung Fu Panda” franchise, making the studio’s films available online for the first time in China.
Youku and Tudou are bitter rivals in the fight to dominate the Chinese online video market, which has 400 million viewers and is emerging as the future of TV in China, where so many people watch on their handsets.
Youku has around 26% of the market and Tudou has some 15%. While both are seeing rising revenues, neither is profitable.
In the last couple of years, Chinese online video companies have started licensing content and creating their own skeins to woo auds.
The suits were filed mid-December in Beijing and Shanghai courts
There is a certain irony here given that both services started out aping the business model of YouTube, banned in China. But in recent years both have been keen to go legit.