China starts realizing harm of Internet piracy

 Piracy is not only a barrier for the work of foreign media companies in China, it also stands to stifle innovation by the country's own dynamic Internet industry, Charles Zhang, chief executive of Sohu.com, one of the China's oldest Web companies, said at a China Internet conference in Beijing on Monday. 

"China needs to clean up piracy on the Internet or face a lag in innovation," the CEO said. "The Internet in China has reached an intense and more developed stage. Protecting intellectual property is becoming even more important ... Solving piracy on the Internet will help the piracy situation in China."

Together with like-minded people of a small but increasingly vocal group of figures in China's fragmented media community Zhang is calling for officials to address a problem previously considered a major thorn for foreign players trying to crack the China market. China’s film market has one of the fastest growths pace in the world, but at the same time it is one of the toughest for foreign film makers because of piracy and limited number of films they can export to China each year. Industry estimates are relatively few, but most measures losses from movie piracy in China of billions of dollars each year. 

In his speech Zhang also considers piracy to be the main reason of tough development of a vibrant movie industry in China, where illegal CDs are usually available within days of a movie's theatrical release for the equivalent of less than $2.

"If we don't solve the problem of piracy, no one will buy movies or watch TV shows," Zhang said. "Everyone will watch it on the Internet, and this will pull down the innovation streak in China."

In September, Sohu was one of several companies that led the formation of an alliance with 110 Internet video copyright owners set on tackling Internet piracy in China.

Copyright controversies have pulled in not only China's small Internet companies, but also major players like search leader Baidu, which was at one point sued by major record companies for allowing illegal sharing of copyrighted music over its site.