Bilibili Sued by iQIYI Before its Hong Kong Second Listing
Chinese video streaming platform, Bilibili, was sued by its competitor iQIYI over copyright issues, a court document shows. The juridical day is set to be March 23, the same day the company will confirm the final offer price on the Hong Kong Stock Exchange.
It is not the first time that the Nasdaq-listed firm gets entangled in copyright disputes. In 2016, it was fined US$8,770 for playing a reality TV show without consent from iQIYI, which owns the show’s distribution rights across all internet platforms. Then in 2018, iQIYI sued the company for providing online streaming of a rap competition show it had produced. Bilibili has also been involved in similar copyright issues with Tencent Video, DouYu, Youku, among other competitors in the industry.
Established by Xu Yi in 2009, Bilibili started as a video-sharing platform targeting viewers interested in the ACG (animation, comics, and gaming) sector. It features a scrolling subtitle system that allows users to overlay comments on playback screens. Over the past decade, the company has grown to be one of the largest video sharing platforms in China, generating revenues from mobile gaming, live broadcasts, advertising, and e-commerce.
Unlike other streaming platforms, Bilibili relies on users to generate content. Some of the most viewed videos on Bilibili are mixed cuts derived from existing movies, TV shows, and news videos, which help boost traffic for institutional content producers. In the fourth quarter of 2020, its average monthly uploads reached 5.9 million, up by 109% from the same period of 2019.
Yet not all content creators on Bilibili produce original work; some would upload full movies or TV show episodes to increase viewership. As the number of active users multiplied in the past years and continues to grow, the controversy over plagiarism will likely persist.
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Bilibili is expected to launch its secondary listing in Hong Kong on Thursday, three years after it filed for IPO in the US and raised over US$480 million at $11.50 per share. The company now aims to draw over US$3.2 billion from institutional investors like Alibaba and Tencent in its secondary listing. Sponsors for the deal include JP Morgan, UBS, Goldman Sachs, and Morgan Stanley.
The final offer price of the company’s Hong Kong listing would be no more than HK$988 per share, a 12% premium on the stock’s closing price in New York. Although Bilibili has declared losses for 13 straight quarters, the company’s stock price in New York has increased by five times in the past 12 months.