Qvod, or Kuaibo in Chinese, was recently sued for video rights infringement and is required to pay RMB260 million (roughly US$42mn) fine. What’s interesting is it turns out the lawsuit was filed by companies led by Tencent, the Chinese Internet giant based in the same city with Kuaibo, Shenzhen. Tencent is joined by Youku, LeTV and state-backed movie site m1905.com.

Founded in 2007, Kuaibo has a business model different from most of other Chinese online video businesses. Most of existing Chinese online video sites have been buying video rights and begun producing original videos, making a majority of revenues from advertising and a minority from paying users.

Kuaibo positions itself as a search engine that indexes content from video sites. But different from average search engines who encourage existing websites to make their webpages indexable, Kuaibo offers tech support for building video sites. What’s more, it even provides a tool for small video sites to source videos across the Web. Qvod takes cuts of revenues generated from advertising on those sites.

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Tracey Xiang

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com