(By You Yunting) Abstract: The nature of “QVOD Business Model” is that both large and small-sized companies are to jointly infringe online copyrights. Under the facts that large companies provided technology and commerce and then small companies engaged in infringing works, such cooperation set up an environment of competitive advantages resulting from weak regulatory. This cooperation’s true cleverness comes from the deepen understanding of safe harbor rules and the Internet’s globalization and anonymity. If “QVOD Business Model” is continuous operating, such model may be cumulative legal risks and thus is likely that a criminal investigation can make an end of “QVOD Business Model”.
By reports, recently, Police raided the headquarters of Shenzhen QVOD Technology Co., Ltd, a leading developer and service provider of streaming media and entertainment content, in an investigation of whether the company was disseminating obscene content according to the masses clues. A few days ago, Police has already caught many website operators who operated video website and used the QVOD server (hereinafter, the “QVOD websites”) and then Shenzhen QVOD Technology Co., Ltd had shut down its server. This raid is likely to be part of special operations over 2014s’ Internet crackdown against pornography and illegal publications.
Actually, police investigation is resulted from the accumulative legal risks in the operation of Shenzhen QVOD Technology Co., Ltd. Because QVOD websites were always out of copyright authorization and were full of sex ads on its video pages. And even some sex websites were only played by QVOD player. Therefore, police investigation against Shenzhen QVOD Technology Co., Ltd is no accident for me.
“QVOD Business Model” means that, Shenzhen QVOD Technology Co., Ltd provided users and website operator respectively with its video player and site-building suggestions and thus is likely to make website operators who upload unauthorized contents and users who search and download the contents.
As such, these QVOD websites are able to appreciate the advantages resulting from the cooperation between large and small-sized companies. On one side, Shenzhen QVOD Technology Co., Ltd may provide a stable commercial supports, including back-office support, advertisement sales and co-operations. On the other hand, the number and small targets of QVOD websites, as an individual, were hard to be supervised and regulated even if they engaged into piracy and sex videos. For these advantages, QVOD websites are quickly becoming one of the most visited sites. As for an Internet company, user’s “visits” means everything so that Shenzhen QVOD Technology Co., Ltd is soon becoming famous in the field of videos.
In short, the nature of “QVOD Business Model” is that both large and small-sized companies are to jointly infringe the legal rights and interests. Under the facts that large companies provided technology and commerce and then small-sized companies engaged in infringing works, such cooperation set up an environment of competitive advantages resulting from weak regulatory. This cooperation’s true cleverness comes from the deepening understanding of the Internet.
Based on deeper understanding of safe harbor rule, Shenzhen QVOD Technology Co., Ltd preferred providing technology than contents so that it could be a technology service provider who can exempt from the infringing contents. Relying on understanding of Internets’ globalization and anonymity, the servers of QVOD websites are outside of China territory and thus are acknowledged the existence of doubts which laws shall be applied into the jurisdiction. Therefore, it is a challenge for the right holder to identify the actual operator.
However, all infringers always leave a hit of infringement clues. This police investigation against Shenzhen QVOD Technology Co., Ltd will find out the Achilles’ heel regarding whether the company indulges uploading obscene contents. It is difficult for the right holder to prove that the company indulges uploading obscene contents. However, the police could use the ways of investigation and interrogation to collect evidences. At this time, in the event that Shenzhen QVOD Technology Co., Ltd shall have known the websites providing obscene contents but still provide technology for the websites, the police shall have found out the breakthrough from their fund intercourse, communication records and commercial contracts.
Even though it is still being investigated whether the “QVOD Business Model” is in violation of laws, in my opinion, QVOD websites which have too much gray income will certainly be investigated soon or later. If they were investigated earlier, this means their violation may be deemed slight consequences with less punishment. Now that they are investigated at this moment, if they were in violation, they may be under serious punishment and even it cannot exclude the possibility of the Senior Executives’ arrests into prison. This may be the reason why the CEO of Shenzhen QVOD Technology Co., Ltd refused to return China.
Finally, one note of suggestion to entrepreneurs is that there are a lot of warning lines in the internet industry such as involving the political affairs, sex contents and illegal financing. As long as you break the law, you will be certainly investigated with criminal liabilities. Barbarian development has baseline of warning lines.