Chapter 715: Another Transformation

At one point, Bilibili faced over two hundred intellectual property lawsuits, and the number kept rising.

The grounds for the lawsuits were simple: these fan-edited, remix, and commentary videos all earned ad revenue and playback income, making them profitable.

Moreover, a single film or TV series had not just one creator offering commentary, but many.

Hollywood film and television copyrights carried high value; losing an intellectual property lawsuit meant paying substantial damages.

Paying out like this would never end.

The reason these lawsuits erupted was that China's current legal framework still ambiguously defined fan-created videos—whether such editing and re-creation constituted infringement had no clear regulation.

Yet this wasn't over—Japanese anime distributors also filed lawsuits against Bilibili.

These lawsuits were even more numerous, nearing four hundred, because Bilibili was originally a hub for anime fans and heavily dependent on this content.

Especially in the Guichu section, there were countless anime clips.

Suddenly, Bilibili faced over six hundred bulk intellectual property lawsuits, plus additional claims over sports event copyrights like the International Basketball Federation and FIFA.

The lawsuits were filed in different locations—Shanghai, Beijing—clearly premeditated and massive in scale.

Without someone pushing behind the scenes, there wouldn't be so many lawsuits all at once, and with such clear targeting.

This copyright war had no warning signs, but tensions had long been simmering; all sides had already been competing.

Qigong Yu of iQiyi summoned his legal team: "Gather solid evidence—we're launching an intellectual property lawsuit against Bilibili too."

Not just iQiyi was stirring; Youku, Tencent, and other video platforms were all preparing to file intellectual property lawsuits against Bilibili.

They had vast libraries of film and television content, much of which Bilibili had fan-edited.

This was an opportunity—an opportunity to suppress Chang'e Technology, whose video content had squeezed too much market share.

It made other video platforms struggle desperately, especially the newly launched "A Smile Is Beautiful," which broke one hundred million views on its premiere day.

Compared to other popular dramas with tens of millions of views, surpassing one hundred million on day one was a record-breaking level.

It shattered all previous records for first-day viewership and became the highest single-day viewed drama on the entire internet.

Trending topics dominated the charts—hashtags like #YangYangXiaoNai#, #QingchengCouple#, and #ASmileIsBeautifulPremiere# surged to ten billion views within days, with discussion volumes exceeding one million.

Moments and QQ Space were flooded with posts.

It became a smash hit with both critical acclaim and massive popularity; Yang Yang rose to become Yutu's newest top-tier male actor.

Unfortunately, Yutu no longer signed artists, but allowed affiliation—each creator bore responsibility for their own actions.

This drama added over 1.5 million new members to Chang'e Video, pushing its total membership past thirty million, placing it far ahead of competitors.

Other video platforms had at most twenty million members—imagine how explosive Chang'e Video had become.

The main reason was the sheer volume of high-quality content: "Joy of Life," "The Nine Gates," "Ghost Blows Out the Light," and others launched in quick succession, hitting a peak.

Other video platforms all felt the pressure; they couldn't just sit idle.

Jack Ma and Lao Wang Zong's copyright war gave everyone an opening and a window to strike at the Principal—it was a domino effect.

Even many copyright companies filed lawsuits against top creators; one YouTuber with six million followers, specializing in anime remixes, received a lawyer's notice.

This included high-view film and TV commentary channels—directly copying Fang Hong's earlier tactic against Panda, cutting off the fuel supply.

This caused widespread panic among creators, forcing many to halt uploads and wait for the situation to clarify.

They couldn't afford to pay damages, nor did they have time to waste fighting powerful figures.

With Hollywood films, anime, domestic video platforms, and other production houses all joining in, Bilibili faced over a thousand lawsuits—massive, sudden, and overwhelming.

This doesn't even include music—90% of music rights were controlled by Tencent; if Tencent moved, it would be a catastrophic event.

Over the years, Tencent had been strategically building its music empire, securing exclusive distribution rights in China for all three global giants: Universal, Sony, and Warner.

They had poured real money into this—Tencent alone paid hundreds of millions of dollars annually to Universal Music.

They also led a consortium to invest roughly $3.4 billion to acquire 10% of Universal Music's equity, locking it in strategically.

Clearly, this was not something an ordinary player could afford—at least not Fang Hong right now.

Don't be fooled by his loud boasts—he simply didn't have the money; compared to Tencent or Alibaba, he was far behind, let alone financial conglomerates.

Of course, Tencent had also bundled deals with domestic record labels, including Zhou Naicha's JVR Music and Emperor Entertainment.

They acquired core assets of China Music Corporation, which contained vast quantities of lyric and composition copyrights.

So if Tencent moved, it would be catastrophic.

If Bilibili had to pay for every lawsuit, it couldn't afford it—it would severely hinder Chang'e Technology's development.

Of course, Tony Ma of Tencent immediately learned of Jack Ma and Lao Wang Zong's copyright war against the Principal; such a massive scale made it impossible to ignore.

Tencent's video platform had also joined in, though music hadn't been heavily involved—there had been minor friction all along.

But if Tencent acted, NetEase, Taihe, and Alibaba would all need to be on guard.

Because once Tencent standardized music copyrights, they'd all be bound by its rules and forced to pay it royalties.

China's current copyright landscape was this: Tencent dominated music; Chang'e Yutu, as a rising force, had consistently strong film and television content sales.

Hollywood rights were all in Alibaba's hands—Youku had acquired a massive library of Hollywood films, thanks to its past wealth.

Alibaba had also invested heavily in Hollywood films.

iQiyi produced many originals; Chang'e Video collaborated extensively with others.

The domestic copyright landscape was essentially this—when these few clashed, every other platform would become collateral damage.

In this era, who hasn't infringed? Every single one had infringed—Bilibili was just more visible because of its massive traffic.

Currently, Bilibili had over 92.7 million monthly active users and revenue exceeding 4.1 billion, placing it in a league of its own; A Zhan, due to internal issues, had collapsed.

"Boss Fang, our situation is extremely dire—if we keep going like this, traffic will drain away," Zhang Nan said.

"We definitely need a strategy—what's your suggestion?" Fang Hong asked.

Lawsuits couldn't be settled overnight; over a thousand cases couldn't be resolved quickly—they'd all have to wait in line.

"First, negotiate with smaller copyright holders. If talks fail, we'll have to sue—but we'll still face compensation. I suggest reducing creators' revenue shares to minimize losses," Zhang Nan said.

Whether we sue or negotiate, it all comes down to money—no payment, no resolution.

And those small third-party agents just want money; as long as you pay them, the matter can be settled.

"Fine, then negotiate with them slowly! Let's set up a copyright advance fund, investing one billion yuan annually to purchase copyright licenses in exchange for secondary creation exemptions."

"But we don't need to lower the revenue share—on the contrary, we'll raise it from the original 70% to 80% to encourage them to keep creating," Fang Hong said.

"What?" Zhang Nan was stunned. What kind of move was this? She didn't understand.

"When problems arise, you can't shift the crisis downward—that way, the crisis still exists, and worse, it damages our foundation."

"This matter must be guided: guide creators to produce commentary videos on older films and TV shows from South Korea, India, and other countries. There are so many films worldwide—if their commentary is interesting and their editing is engaging, even trash will get viewers."

Fang Hong told her.

Zhang Nan nodded, looking enlightened. Indeed, many viewers didn't care about the edited content—they just wanted entertainment and emotional value.

Whether you edit South Korean films or Indian films doesn't matter—you'll still gain massive fanbases.

They just need to shift toward buying niche films and adding them to the content pool for creators to reuse.

"But why raise their revenue share? That'll massively increase our expenses," she said.

"Stabilize the core base. As long as the core base holds, we can keep fighting them. Money can be solved in other ways. Once user habits form, they're nearly impossible to reverse. Once traffic is seized by others, it's hard to win back." Fang Hong said.

"We've just had too many expenses lately, and game revenue has declined," Zhang Nan said.

We not only have to acquire assets, but we're also being reported for improper game practices. Plus, we've already invested six billion yuan in the film industry—our expenses are simply too high.

Now there's the copyright war too—there are simply too many difficulties.

"It's fine. Difficulties exist, but we can overcome them." Fang Hong had his measure.

After six years of development, Fortnite was officially released across all platforms on July 13, including mobile.

The game is free with zero barriers; PC, console, and mobile versions are fully cross-platform, completely breaking down user boundaries.

For the iOS mobile version alone, revenue reached $15 million in 48 hours; across all platforms, weekly revenue hit $150 million, with total players surpassing 45 million!

Faster than any previous game, it was wildly popular and became a phenomenon-level online game.

After six years, everything that needed polishing had been polished, all pitfalls avoided, and prior testing had built up massive popularity.

Revenue comes from in-app purchases: skins and battle passes, each priced at $9.99, selling over five million units in the first period.

It's similar to other online games, but it never launched on Steam—there's no need to sell the game there.

Within one month of launch, revenue exceeded $296 million, with peak concurrent players surpassing ten million.

But the game never launched in China; from the start, its development didn't target Chinese players due to too many restrictions.

The ongoing controversies over minors playing games—Chang'e Technology is still cooperating with rectification efforts.

Of course, Chinese players who want to play can still access it via VPN—gaming via VPN is easy, as long as they avoid other harmful content.

Otherwise, Steam wouldn't be so popular—it's all accessed via VPN.

So Fortnite can fill the gap and help close the shortfall. In its previous life, this game generated over $5 billion in annual revenue, making it one of the world's most profitable games.

Currently, Chang'e Technology's entire annual revenue is only $6–7 billion—this game could nearly double it.

As long as projections are sound, Fang Hong has the confidence to raise the revenue share and confront them head-on.

As the two were talking, Fang Hong's phone suddenly rang. He pulled it out, glanced at it—it was Zhang Hongsen calling.

As soon as he answered, the man joked: "You've been making quite a spectacle this year!"

He meant the previous battles with Huayi, Alibaba's "choose one or the other," the ten-billion-yuan investment in film, Tu Ying Conference cutting off Wanda's film sources, the recent cinema rent hikes, and now the copyright war, plus the acquisition of Bona—all one after another, never stopping.

"Sorry to be your entertainment, but I'm struggling too!" Fang Hong sighed.

"What are you struggling with? All I see is you bullying others," Zhang Hongsen said.

"What would make you think that? I'm the one being bullied—I'm just defending myself. Does winning a defense mean I'm bullying others?" Fang Hong said.

"When one person hits another, there's still self-defense."

"You're just brawling—it doesn't even qualify as self-defense," Zhang Hongsen said.

"Fine, you say it's so—you're the referee, you have the authority," Fang Hong didn't argue; the man truly held the authority.

"I heard the real estate developers wanted to raise rents across all your cinemas—is that true?" Zhang Hongsen asked.

This was his domain—the real estate developers were sticking their hands into his territory.

"Yes, but I pushed back," Fang Hong said.

"You should be praised for that—well done. Those real estate developers don't care about the film industry's survival; we must prevent them from harming the healthy development of cinema," Zhang Hongsen said.

"It's just my duty," Fang Hong demurred.

"I'll tell you something: we've reviewed the report you submitted on promoting the healthy development of cinema chains—your recent actions have violated regulations," Zhang Hongsen said.

"Which one?" Fang Hong asked.

"Unfair competition, abuse of market dominance, forced cutoff of film sources—your actions constitute vicious competition," Zhang Hongsen said.

"If you say that, then Wanda also violated regulations—they were the first to monopolize my screening slots, preventing our films from being shown in their theaters—that's also vicious competition and abuse of market dominance. Oh, and those real estate developers they brought in? Their behavior was utterly despicable." Fang Hong was preparing to countersue.

"Hah, you really won't give an inch," Zhang Hongsen laughed.

"I can't give in—it's already reached boiling point, I can't stop now. If you're going to release that report, release it—we must have one side back down," Fang Hong said firmly.

Some things can't be compromised—if I compromise now, what was all my fighting for? What was all this effort for? It would be meaningless.

His earlier report, Zhang Hongsen and his team must have reviewed and revised it—they're preparing to release it.

Whether they release it or not, they'll continue fighting him in other ways.

"Do you really demand that certain films must be shown in specific theaters? If so, you could require art-house films to screen nationwide in every cinema instead of limited releases," Fang Hong added.

"We won't mandate that—but your abuse of market dominance can be deemed as disrupting order," Zhang Hongsen knew such a demand was unrealistic.

Every film has the right to choose which cinema chain to release on—massive release or regional release is acceptable.

As long as the film passes review!

But the interpretation of this lies in their hands. Though they won't control which cinema chain you use, they'll oppose malicious acts that disrupt order by cutting off supply.

In any industry, the interpretation of rules leaves enormous room for discretion.

"Alright! What do you want from us?" Fang Hong said.

"Don't take it too seriously—I'm not here to demand anything of you. Your business is still yours to settle. The reason I'm calling is just to let you know: the *Mars Rescue* you filmed has been selected and submitted to the Oscars on your behalf. As for whether it actually wins, good luck to you." Zhang Hongsen said.

He made this call mainly for that matter; everything else was just a reminder. As for their feuds, as long as they didn't cross the line, he wouldn't bother with them.

And any film with a domestic-production nature requires official selection and submission—individuals and organizations cannot submit on their own. Only one film per year.

Last time, that animated film was also Zhang Hongsen calling to notify them.

Even though it was a co-production, the procedure was the same.

"Got it, thank you, Director Zhang." Fang Hong said.

"Same thing as always—although the market environment is what it is, you still need to keep your restraint. You're still young." Zhang Hongsen said he had plenty of time.

Of course, the current rights market is full of fighting, and it's not just Fang Hong fighting—he too is being swept along by the times.

Because the rights market is about to undergo another transformation!

(End of chapter)