Shenzhen QVOD Technology has so far fended off piracy-related lawsuits in local Chinese courts, according to Lu. Youku Tudou's talks to mitigate the problem with Kuaibo's developers have also fallen through, he added.
Chinese authorities have been slow to stop online piracy, giving file-sharing software such as Kuaibo ample room to grow, said Zhang Fan, an analyst with Beijing-based research firm Analysys International. Small video sites offering the pirated content, can keep their costs low, while drawing in revenue through online advertisements, he said.
Larger mainstream sites including Youku Tudou, however, are losing out on potential profits, especially as they try to offer users paid services for exclusive online video content. Users will instead resort to visiting pirate video sites, Zhang said.
"There hasn't been an effective way to control the P2P technology yet," he added. "If there's little supervision over it, then the piracy will continue."
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