The Plan on the Revitalization of the Cultural Industry promulgated on September 26, 2009 provided a political and financial support for the development of the new medium industry. In January 2010, the State Council made a decision to accelerate the integration of the networks of telecommunication, radio, television and the Internet, so as to promote the transformation of the new medium from a one-way communication to a two-way interactive communication and from a single terminal to multiple terminals. The rapid development of the new medium industry provides a more convenient transmission channel for the traditional movie and TV industry.

 

Wang Bing, general secretary of the New Medium Industry Alliance, said, “The new medium is an innovative medium form based on the digital information technology and is featured with the interactive multimedia.”The new medium is metaphorically called the “fifth medium” when compared to the four traditional media, that is, press, radio, publication as well as film and video. The copyright distribution and coordination in the digital environment have become a bottleneck for both the new medium and the traditional film and TV industry have to break through. As the leading domestic enterprise specializing in the integration and distribution of the film and TV programs, Sun Shine occupies more than 80% of the new medium market shares. Its unique business model as well as its efficient and pragmatic corporate culture is helping create a genuine win-win industry chain.

 

 

According to the statistics issued by the CNZZ Data Centre, the overall traffic of video websites in the fourth quarter of 2010 had a substantial increase when compared to the third quarter. Up to 2010, the video websites had a total volume of 410 million video items, with an increase of 70,000-80,000 per day. In the increasingly mature market of the new medium, Sun Shine targets at the hit TV and film programs and aims to quickly penetrate into various new medium channels, so as to gradually achieve a various distribution of entertainment programs across traditional media and the new medium. Sun Shine’s distribution features customizing different channels of programs. By taking the advantages of the new medium and traditional media, derivatives from film and TV entertainments are under exploration. In a word, Sun Shine pursues such an operating spirit that it first spends a large amount of money in purchasing large quantities of genuine contents and then release them out at low prices, such as providing Internet cafes with cheap genuine contents to help them finally embark on the road of genuineness. It is reported that the Beijing Copyright Bureau is planning a project of copyright information publicity to lead the network video industry into a standardized mode.

 

The Sun Model promoted by Sun Shine features a win-win situation with content providers, film and video service companies, distributors, copyright safeguarding partners, government departments and consumers. The CEO of Sun Shine said, “Presently, competition does exist, but it is partially focused on one or two dramas or programs. Sun Shine is a scale economy. The more cooperating customers we have, the more programs we can get. The cost will be correspondingly lower for buyers. Sun Shine’s platform is indispensable for digital media. The operating model is logic and reasonable. In the competitive world, Sun Shine pursues competition.”

 

 

Recently, with the development of the network economy and the Internet technology, rise various video sharing websites. Induced by interests, a lot of infringements related with network videos take place. It cannot be denied that there exist some deficiencies in the network video industry. As a new industry, it must go through a hard process to achieve development and growth. At the beginning of 2010, video websites fought with each other, resulting in lots of copyright disputes. There are basically three cooperating models between video websites and copyright holders, that is, direct purchase, content exchange and copyright distribution. Xu Leilei said, “Sun Shine, owing the network information disseminating rights of numerous movies and TV programs, suffers huge economic losses caused by infringement.”

 

To safeguard its legitimate rights and interests, Sun Shine invested a lot in combatting piracy. On May 6, 2010, Sun Shine, together with the producer of the new Three Kingdoms TV series, formally claimed a compensation of 100 million Yuan from Youku net, Tudou net, 56 net, Henkuai net, PP net and so on for infringement. 10 million Yuan in cash was taken out to reward the people providing the clues of piracy. Joining hands with related governments, the producer of the new Dream of Red Mansions TV series and the mainstream media, it established a “Genuine Network Video Alliance”. By taking the opportunity of distributing the new Dream of Red Mansions through the new medium, Sun Shine launched a special campaign of cracking down infringement in 100 cities within a period of 100 days; and an anti-piracy fund of 10 million Yuan was established to reward the clues provider upon the pirating of the new series. Sun Prime has obtained the exclusive dissemination right for the new Outlaws of the Marsh TV series. Though the series premiered in ten television stations on January 1, 2011, online piracy has begun to spread.

 

Xu Leilei thus pointed out, “Combatting piracy requires legal methods, social support and effective law enforcement. The digital medium features its quick reaction capacity, but it also has the deficiency of being hard to ‘dredge and stop up’. When the Outlaws of the Marsh had not yet broadcasted on TV, the HD version began to spread on the Internet. Such an action not only destroyed the interests of right holders, but also dealt a serious blow on the creator’s legal interest and creative enthusiasm. Sun Shine is about to clear the piracy of the Outlaws of the Marsh. The related piracy data and evidence will be submitted to the National Copyright Administration, Cultural Law Enforcement Unit, General Press and Publication Administration and the State Administration of Radio, Film and Television. Our own legal supervision will be further launched.”

 

It’s reported that since 2010, the Internet copyright cases heard by the Beijing Courts have presented an increasing trend. As of the end of 2009, the Internet copyright cases accounted for 46.7% of all copyright cases, which had become an important part of intellectual property cases in Beijing. The Guidance on Several Issues Concerning the Internet Copyright Disputes (Trial verion) issued by the Beijing High People’s Court was promulgated on the basis of in-depth research and extensive views from various parties. It is expected to achieve consistent law enforcement. Xu Leilei believes that “genuineness is the king!”

 

 

As the consulting report of China’s new medium industry predicates, China’s new medium industry will grow at a rate of 30 - 40% annually in the coming years. In 2011, the whole revenue of the new medium industry will reach 300 billion Yuan. Shanda Group is the main investor of Sun Shine in terms of capital, resources and management. Xu Leilei expressed, “I am standing on the shoulders of giants. I am learning from its successful experience. As a hard worker and investor, I believe genuineness is what I pursue, as such a pursuit is consistent with the commercial law. We should persist on genuineness, even though there are hardships.”

 

China IP: What obvious achievements have Sun Shine made in 2010? What’s your plan for 2011?

Xu Leilei: In 2010, the copyright field was full of ups and downs. Thanks to the support from national authorities such as the Press and Publication Administration, the State Copyright Administration, SARFT and other corresponding authorities, Sun Shine benefited a lot from all new medium platforms and film and video producing and distributing organizations. In 2010, plenty of new medium platforms and film and video companies entered capital market and some of them have become the Star Companies such as youku and letv. The year of 2010 was a rewarding year for Sun Shine. First, the distribution model of legitimate digital film and TV programs has been set up. Second, plenty of new medium companies’ emerging instilled us new confidence as well as pressures. We hope we can do better in 2011 and make our contributions to genuineness. Meanwhile, we are determined to explore more business models to meet the needs of the market and consumers.

 

China IP: The government paid much attention to the combatting and supervising of the piracy of network videos. We saw some progress. What problems do you think still exist? And what’s your expectation on the stipulation of related regulations and laws as well as the law enforcement?

Xu Leilei: The standardization process is rather quick. Actually, although the legal system is not perfect and the enforcement is not so strong, Sun Shine is thankful for the public’s support and recognition of genuineness. From the Jian Wang Action started at the beginning of 2010 to Premier Wen Jiabao’s speech about the IPR protection delivered in October 2010, we were constantly encouraged. I hope some practical measures will be stipulated from the criminal perspective. At present, the profit made from piracy is very high. The treatment with the antenna event gave us confidence. We are willing to actively cooperate with government and provide our market data and references.

 

China IP: The Sun Model has been in operation for one year. Is it effective? Are you worried that others copy it?

Xu Leilei: The Sun Model is a content customized solution. It is not simply to buy programs and then sell them. Some small companies are copying the Sun Model. But they don’t get the essence. A win-win operation is systematic in nature. Such a model includes promotion, combatting piracy, acting for other peripheral resources and establishing content platforms.

 

The Sun Model is under optimization and improvement. It is based on the copyright operation of film and TV, including film and TV program producers at the upstream and publishing platforms at the downstream. All users of the new medium, film and television and fans can become a member of us and all parties can benefit. We have hundreds of partners. Except theater and public TV stations, our genuine programs extend to all places related with digital transmission. In short, the Sun Model is a win-win model based on the copyright cooperation. We opened a public hotline. And now many people with the concept of copyright report to us. We hope we can expand our operating chain. Actually, more than ten thousand Internet cafes are benefiting from the Sun Model.

 

China IP: What’s the relationship between the traditional media and the new medium?

Xu Leilei: I think that the digital medium and the traditional media should co-exist instead of being replaced by each other. If there were no promotion on the marketing and distributing of a film by cinemas, the program would not be known to digital medium users. Traditional media have their own users while the new medium has its own customers. The two must be complementary. I personally hope they co-exist. Because based on the long-term coexistence, the two sides can be more open and complementary.

 

In 2004 and 2005, when the new medium appeared, I entered this field. I experienced its birth to the rapid development. Its market rules are similar with business rules. The difference is that different people operate it at different times. In my opinion, new digital medium can not produce new models, but will bring new technologies. Simply, it is to apply new technology to traditional models. Hunan Satellite TV positions happiness and fashion, Jiangsu Satellite TV positions human care, and Anhui Satellite TV positions opera sharing. From their models and experiences, we extract some essence and apply them to digital media.

 

China IP: As an entrepreneur doing business related with copyright, how do you value the operation and development of the video industry?

Xu Leilei: Doing copyright-related business is a kind of investment. It’s a process of one investment for multi-time usages. First, it is a scale economy. After investing, we should explore as many as users and let them share the cost. Second, it is not a process of investing one coin and getting back two. Investing has its own value. When Sun Shine is doing copyright-related business, there are not so many competitors. Therefore, if you want to dominate the field and become the first enterprise to try tomato in the field of the new medium, you must have a deep understanding of the field. Last, as the founder of Sun Shine, I regard my time as an investment. The purification of copyright environment and the development of China’s economy make me believe that genuineness is the eternal principle we should follow.