As China beefs up intellectual property rights (IPR) protection, the country's online video industry is bidding farewell to the era of rampant piracy.

Shenzhen QVOD Technology Co., Ltd. became the latest major online video service provider to fall victim to an IPR infringement crackdown.

Police in Shenzhen, which borders Hong Kong, busted QVOD Technology Co's headquarters last week following allegations that the company was distributing pornographic content.

Earlier this month, QVOD Technology shut its QVOD (quasi video on demand) servers after the National Copyright Administration said the company, along with Baidu's video service, violated copyrights.

QVOD Technology was also defending more than 80 copyright infringement cases in the first four months of the year.

The company, founded in 2007, said that it would invest no less than 100 million yuan (16 million U.S. dollars) on copyright purchases in the coming year.

It used to offer pirated and pornographic videos with peer-to-peer video streaming technology. Its user base quickly grew to 300 million.

Other industry players, including Youku, Sohu Video and Tencent Video, also relied on pirated and pornographic content in their initial growth stages.

They have now banned such content and purchased copyrights to follow international norms. They use advertising and paid video-on-demand services to cover costs and generate earnings.

In November, the three major players established an alliance to fight against copyright infringement by Shenzhen QVOD Technology Co. and Baidu's video service, demanding 300 million yuan in compensation.

Copyright protection is vital for the healthy development of the online video industry, said users on Sina Weibo, China's Twitter-like microblogging service.

"Awareness in IPR protection is getting stronger and it is inevitable QVOD Technology has to transform its business model," said a Weibo user "Weiqi wishes to become a fish".

Wang Xin, chief executive officer of QVOD Technology Co., said only by abiding the rules can the company survive.

"Pirated content helped us gain quick expansion," said Wang. "But times have changed and rules have changed. If we wish to survive, we must abide by the rules."