piracy problems of its own. Effects are also seen in the share of film revenues made up by box office receipts. For U.S. films released in China, box office receipts make up over 90 percent of total revenues generated, compared to only 25-30 percent in the United States. This difference is partly due to the widespread piracy of motion pictures over the Internet and on optical discs. Reports indicate that unauthorized camcording of movies in theaters, one of the primary sources for online audiovisual infringements, remains a serious problem in China, especially in the South. Online piracy extends to unauthorized access to, or unauthorized copies of, scientific, technical, and medical publications as well.
While these very substantial problems continue, a range of enforcement actions by China are welcome and could have increasingly beneficial impacts if sustained and expanded. In 2014, China carried out the 10th "Sword-Net" campaign focused on protecting digital copyright. Administrative authorities reportedly investigated 4,400 online piracy cases, issued substantial fines, made 66 referrals to criminal authorities, and took other actions against pirate websites. Chinese courts and agencies entered deterrent-level penalties against a number of large major online piracy services including those offered by QVOD, Baidu, SiluHD, HDstar, DY161, and FunShion. For instance, in June 2014, the Shenzhen Market Supervision Administration imposed a record $42 million fine against QVOD, a video streaming website, for making available pirated movies and TV shows to its subscribers. In addition, National Copyright Administration of China (NCAC) entered administrative penalties against Yyets and Shooter.cn. Another welcome development was China's first criminal conviction for illegal camcording.
Parties in China are also facilitating online infringement, in China and third countries, through media box piracy. Manufactured in China and exported abroad, media boxes can be preloaded with infringing content or links to content sources and plugged directly into televisions. They enable the user to stream and download infringing online music and audiovisual content. The vast majority of the infringing websites and apps to which media box users connect are reportedly located in China. The United States urges China to continue efforts to improve IPR protection and enforcement in this area.
Other Concerns
New regulations related to State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) review of foreign television content present a serious market access concern for the online distribution of imported films and television series. Legitimate video streaming websites such as those operated by Sohu, Tencent, and others represent an important gateway for U.S. and other foreign television content providers to reach consumers in China. The new regulations threaten legitimate commerce through the imposition of a number of onerous registration requirements, while doing little to curb infringing streaming sites. The
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