China's Baidu Opens Online Music Store With One-Stop China To Crush Illegal Downloads

BEIJING — Baidu Inc., which operates China's most popular search engine, said Tuesday it will distribute music from three global labels in a deal that its partners say could help clean up China's piracy-plagued music market.

Music companies have sued Baidu twice over accusations it profited from unlicensed music copying by maintaining "deep links" on its search engine directly to sections of pirate websites.

The venture steps up Baidu's rivalry with Google Inc., which closed its China search engine last year but still operates a music download service in this country, which has 485 million Internet users.

Baidu said it will distribute music from One-Stop China – a joint venture between Universal Music, Warner Music and Sony Music – and pay them for the content. The downloads are available only to computers with Internet addresses in China.

Baidu and the music companies also agreed to end outstanding litigation between them.

China is seen as a major potential market for online music and video but legitimate suppliers have been hampered by rampant piracy.

In what the music companies see as a key part of their agreement, Baidu promised to eliminate "deep links" to pirate music sites, said Andrew Chan, One-Stop China's chief representative.

"That means all traffic will be directed to legal links," he said.

Chan expressed hope the commitment by such a prominent Chinese company to legal music would cause other websites to stop using pirated copies.

"We believe many medium and small-size companies that have infringed our music rights for a long time will think they have to change," he said. "They will see their big brother, Baidu, is changing to be a legal music service provider."

In the legal settlement, Baidu agreed to donate an undisclosed sum to the anti-piracy fund of a global music industry group, the International Federation of Phonographic Industries, according to the IFPI's Asia regional director, Leong May Seey.

Baidu had 75.9 percent of China's search market in the three months ending in June, while Google was in second place with 18.9 percent, according to Analysys International, a research firm in Beijing.

About 500,000 songs from the music companies' global, Mandarin and Cantonese catalogs will be made available through Baidu at the start and expect that to rise to 1 million titles as new releases are added, according to Chan.

A Baidu spokesman, Kaiser Kuo, said the company was not releasing revenue forecasts.

Chan said he expected One-Stop China's digital music revenues in China to double or triple in a short period, though he had no financial details. The venture was created in 2009 and has a separate agreement to distribute music through China Unicom Ltd., one of China's three mobile phone carriers.

Baidu's music downloads will be free to users through its advertising-supported ting! platform. But Chan said the company also is looking at creating a pay section that will offer additional services.

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Baidu Inc.: http://www.baidu.com

Comments

[hwholesalehair]

03:07 AM on 07/20/2011

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[nobodysgonnareadthis]

06:18 PM on 07/19/2011

A Chinese download site? OK, now the music labels have a more creative excuse: "We don't know how much we owe you in royalties, Mr. Songwriter. The spreadsheet figures from China haven't been translated yet..."

Let's be cautious when examining the Asian market.
Yes, there have been many hacks, spoofs and denial of service attacks pinged off Chinese web servers, but there's no proof that they originated there... hackers come from every corner of the map.

Yes, there are a few Chinese factories that make knock-offs of popular brands, but there are more that are subcontractors to major world corporations; America's been taking fiscal advantage of the Chinese work force for decades.

Yes, the Chinese government has been criticized for its' positions on human rights and intellectual property protections, but many of those rights were neglected for decades, if not centuries, in America and around the world.

[blackreign]

12:00 PM on 07/19/2011

People should have every right to share software they have purchased, as long as they don't sell or use it for financial gain.

[netzwerg]

11:10 AM on 07/19/2011

Nooo!

http://mp3.baidu.com is my favourite source for music, they have everything that iTunes has and more, but for free.

[s002wjh]

03:44 PM on 07/19/2011

you can still use sogou.com for music

[Tenement Funster]

10:59 AM on 07/19/2011

The record industry is long famous for dubious accounting practices with regard to royalty payments, so it is going to be interesting to see how closely the global music giants will attempt to keep the Chinese honest here. I frankly see this is another opportunity for Chinese officials to line their pockets through skimming off of these downloads and there ain't jack the RIAA and other record industry groups, let alone artists, can do about it.

[notalwaysfittoprint]

10:30 AM on 07/19/2011

Oh that's rich coming from a country that has been copying other peoples' stuff for years!

[jabreal00]

01:44 PM on 07/19/2011

The Government of China has little regard for intellectual property. They are great at copying but cannot innovate. There is a mall in Shen Zhen, China devoted to selling fake designer brands of all kinds. Even the fast-food court have copycat eateries.

[blackreign]

03:13 PM on 07/19/2011

China is chock-full of technological marvels. They just have a different culture than America, their attitude towards electronic media is very different and 'open'.