Piracy wars: China’s Xunlei, criticized by the MPAA, blasts back

China’s streaming video market is a lot more respectful of copyright law than it used to be, but if you think that means there aren’t still major disputes, think again. In fact, even a cooperative partnership with the Motion Picture Association of America (MPAA) hasn’t been enough to get Chinese company Xunlei out of the copyright violation firing line.

You may remember the name Xunlei, as the company has historically been known as one of China’s worst offenders when it came to facilitating piracy. It operates a variety of online services including download accelerators and streaming online video, but pirated content was so rampant on the company’s platforms that it was forced to cancel a planned US IPO in 2011. Recently, things had been going better – the company netted a massive US$310 million investment round led by Xiaomi last spring, and the company signed a cooperative anti-piracy agreement with the MPAA in June.

But the MPAA clearly isn’t satisfied with what Xunlei has done to reduce copyright violation on its services. In a report released last week by the MPAA, Xunlei was once again listed as one of the world’s most “notorious” online markets for video piracy. From the MPAA report:

Xunlei.com features a proprietary, high speed P2P file sharing system that distributes unauthorized copies of motion picture and television content. The system incorporates the website’s own desktop download manager with file formats unique to the system. Recently, Xunlei’s public service, Kankan, transitioned in format and now streams some authorized motion picture content. It also offers a “VIP Offline” service for a monthly fee. However, infringing content can be found with this service, which is downloaded by Xunlei from an external source and stored to its servers for on demand viewing. Despite executing a comprehensive content protection agreement with MPA earlier this year, there is no evidence that Xunlei has fulfilled its obligations and wide levels of infringement are still evident.

The report also cites China’s Yyets.com as a notorious market that links to, rather than hosts, pirated content.

But Xunlei is apparently having none of it. According to Techweb, the company issued a response to the MPAA’s allegations on Thursday that is quite unambiguous:

First, Xunlei has continuously respected and protected copyrights, and there is no pirated content whatsoever on Xunlei.com. Second, Xunlei has a cooperative agreement with the MPAA and has continuously been working hard to control and restrict piracy through the development of innovative technologies and through the development of a supply chain for licensed copyrighted content.

The problem is likely that while Xunlei itself is licensing content, its P2P download services still allow for the sharing and viewing of pirated TV shows and films. And unfortunately for the Chinese company, that appears to be a large part of Xunlei’s appeal. One commenter on the Techweb article linked above put it bluntly: “[Xunlei], if you had no pirated content you’d have no content at all.”

Of course, Xunlei and China will have to decide how much they truly care about the MPAA’s criticism. The company has already placed some restrictions on its P2P services, but it ultimately answers to the Chinese government, not the American MPAA or the US trade representative that the MPAA’s report was submitted to. China’s online video market has made significant strides in recent years on removing pirated content and licensing more legitimate content – that much is undeniable. But piracy remains a problem, and whether China’s government really wants to stamp it out completely remains to be seen.