A recent court ruling against a leading Chinese video streaming service has answered questions about demands for extra payment for "advance screening on-demand" access to popular new TV dramas and will contribute to the regulation of the industry, legal experts said.
On June 2, Beijing Internet Court said the actions of iQIYI, one of the country' largest online video service platforms, were unlawful when it demanded extra money for "advance screening on-demand" for a TV drama in addition to its premium membership, enabling people who subscribed to the add-on service to watch the new video content before others who had paid premiums earlier.
Plaintiff Wu Shengwei said he paid 178 yuan ($25) to buy a one-year "gold VIP" membership from iQIYI in June last year.
The online contract said he would always be able to watch new episodes of popular TV dramas before non-VIP users.But in December, he discovered he needed to pay an extra 3 yuan an episode if he wanted to watch the latest episodes of Qing Yu Nian, or Joy of Life, before other users.
He took iQIYI to court at the end of last year.
During Tuesday's trial, the company said it began offering the new service by updating contracts on Dec 18.
But Zhang Wen, president of the court and the judge who heard the case, said in her ruling that "the unilateral and arbitrary alteration of some terms of its VIP membership breached the Chinese Contract Law and infringed on the rights and interests of members who previously had also paid premiums".
iQIYI did not effectively implement its obligation to notify users when their contracts were updated, she added, which made the changes to the advance screening on-demand service "invalid".
"The updated contents in the contract greatly diminished premium users' viewing experience and satisfaction," she said, ordering the company to pay Wu 1,500 yuan in compensation and extend his membership for 15 consecutive days.
The court did not ban the service, "but the business model must be operated based on nonviolation of laws and respect to users", she said.
On Tuesday, iQIYI responded via its Sina Weibo microblog account, saying that the introduction of the extra paid advance video-on-demand service had aimed to satisfy users' diverse demands.
It said the court had not condemned its use of such a business model, and it would constantly improve its products and services to bring consumers a better experience.
Source: English.court.gov.cn
