Widely used domestic video portals UUSee, VeryCD and Xunlei were recently warned by the National Copyright Administration of China (NCAC) because they failed to supply required copyright documentation for many of the online movies and TV dramas offered on their websites.
The warnings were issued after the NCAC launched a copyright examination campaign last April asking 18 national video websites to hand in lists of their 50 most popular movies and top 50 TV dramas, along with proof of authorization from copyright owners.
In the end, 1,581 movies and TV dramas were submitted, 12 percent fewer than the required number.
Of the 1,206 documents supplied to support the online entertainment, just 282 met NCAC requirements - only 23 percent of the popular movies and TV dramas on the 18 websites met the administration's guidelines for legal content.
The figure for less well-known shows could be even lower, said industry observers.
UUSee and VeryCD were two of the worst in complying with the copyright check. None of the movies and TV dramas on the list from VeryCD had authorization documentation.
NCAC announced that the websites would be "blacklisted and charged if things do not get better in two months".
Wang Shanna, vice-president of Xunlei, which also received a warning, told National Business Daily on Jan 3 that the company did not offer the information due to "careless work".
"Xunlei cooperated with copyright authority during the campaign, but errors occurred because of some turnover of staff," she explained. "We started handing in the documents after receiving a warning from the NCAC."
The copyright watchdog also found that VeryCD was providing a "skip" service that provides a link or redirection to a video on a partner website. It said this is also illegal, even though VeryCD does not provide the content directly.
"The producers of long videos - movies and TV dramas - have spent a great deal of time and money, so we believe they would not possibly upload their products onto websites," said Zhao Zhanling, an IT law expert and chief advisor at chinaweblaw.com.
"So if a website allows Web users to upload movies and TV dramas, it allows piracy.
"The websites are at high risk of losing in a copyright dispute, but it costs so much for legal owners to protect their rights," Zhao said. "The legal process lasts at least half a year and the website can make a profit over that period.
"Also, the monetary awards are usually very low - only 10,000 yuan ($1,585) or 20,000 yuan for a movie or TV episode, far less than just court filing and notarization fees for a lawsuit," he added.