Which Copyright Should Internet TV Operators Purchase?

Analysis on the Prohibition of Xiaomi Box and Legal Issues Concerning Internet TV

(By You Yunting) Recently, Xiaomi Tech (the “Xiaomi”), a thriving Chinese smart phone maker, released its “Xiaomi Box” (the “Box”), which enables the user to play online video on their television. Moreover, it also supports TV, games, music, and photos. Strangely, however, the Box ceased its video service under the claim of system maintenance only one week after its release.

According to some media reports (note: the link is in Chinese), the Box is a kind of set top box, and according to the rules of the State Administration of Radio, Film and Television (“SARFT”), such products must first be administratively approved before they can be used in online TV. Despite the cooperation made with WASU, other content available from Xiaomi’s box, such as video from Sohu, Tencent, PPTV, or iFeng are against Notice No. 181 issued by SARFT, which regulates that each set top box can only provide content from licensed video providers.

This issue reminds me of what I encountered with Shanda Box when I working at Shanda Inc. At that time, Shanda released its system, “Shanda Box,” which could display internet content on your TV. And, just like what might have happened in this case, Shanda’s box was banned by the SARFT (Note: the link is in Chinese).

I also noticed an article titled “Watch out: Three Directions to be Avoided by Entrepreneurs”(Note: the link is in Chinese). In this article, the author reminds entrepreneurs not to enter into internet television services and advocates that “the technology threshold of this market has been reduced by Apple TV to a relatively low level, and with the popularity of smart mobile devices and the gradual acceptation of the concept of a “smart family,” the market is becoming mature.” But, “entrepreneurs should never rely on their luck, –… or evaluate them to be too strong, otherwise it will only lead to ruin.”

There is a paradox in the above report and facts. Although the technology has already matured, internet TV still remains a minefield that is not to be stepped in. You may ask, then “why?” The Internet is among the greatest inventions of the last century, and once its content can be displayed on TV, it would be of great significance to social development and cultural prosperity. Why then can’t entrepreneurs engage in internet TV? If all the videos communicated online is broadcasted by the websites approved by SARFT with the Internet Audiovisual Programs Communication License, then why does Xiaomi Box break the rules when it provides video to users? And, is there any standard on the reasonability or legitimacy within the regulations governing internet TV issued by the administration?

All these questions compel me write this article to express my personal thoughts on internet TV and related legal issues. In today’s post, let’s first check how many copyrights are involved in internet TV.

At the end of 2011, SARFT issued Demands for Management Concerning Operation of Institutions with Internet Television Licenses (the “Demands”). Article 2 section 4 stipulates that:

“Programs broadcasted on the platform of internet TV content services shall be of the same standard, scale, and management demands of those of television programs, and shall have the copyright as the program broadcasted on TV.”

In my understanding, this regulation is contrary to that stipulated in the Copyright Law.

Through the normal set top box with cable TV interface, two video broadcast methods can be utilized. One is similar to live broadcast on TV, and the other is VOD (video on demand). According to Article 10 paragraph 11 of the Copyright Law of China, the live broadcast by cable TV is regulated by the broadcast right (despite its name of “broadcast,” this right can also be applied to the video industry). The following is the original article in the Copyright Law:

“the right of broadcast, that is, the right to publicly broadcast or communicate to the public a work by wireless means, to communicate to the public a broadcast work by wire or relay means, and to communicate to the public a broadcast work by a loudspeaker or by any other analogous tool used to transmit symbols, sounds, or pictures;”

On the other hand, VOD is more like the right to network dissemination of information, as provided in Article 10 paragraph 12:

“the information network broadcast right, that is, the right to communicate to the public a work, by wired or wireless means in such a way that members of the public may access these works from a place and at a time individually chosen by them;”

The live broadcast is kind of unidirectional transmission, which means you can only watch what it broadcasts, and the spectator has no option about when to watch. VOD, however, is bidirectional; the video is played on the demand of the user, who has complete liberty on when to watch. Between the live broadcast and VOD, the set top box contains the function of playback or replay, and despite the fact that the replayed part is “past live video,” it still meets the legal definition that “members of the public may access these works from a place and at a time individually chosen by them.” Therefore, it can be included with VOD.

According to the features of the Box, it has no cable TV interface. Therefore, even if you could watch live videos, they could not be regulated by the broadcast right but would be governed by other rights in the Copyright Law. According to the Copyright Law, which rights to be applied to a specific business shall depend on the business’ nature and shall not depend on the screen by which it appears. For the Box, its live broadcast shall first gain other rights in the Copyright Law, and, as to the playback or VOD, they shall first be granted the right to network dissemination of information. Therefore, to demand all online TV be controlled by the right of broadcast in the Demands is apparently contrary to the Copyright Law. According to Article 79 of the Law of Legislation of China:

“Law shall have a higher legal authority than the administrative regulation, local regulation, or rules.”

For this reason, such articles shall be invalid.


Lawyer Contacts

You Yunting86-21-52134918  youyunting@debund.com/yytbest@gmail.com

Disclaimer of Bridge IP Law Commentary

Leave a Reply

Your email address will not be published. Required fields are marked *