Baidu strikes music deal

20 July 2011

BEIJING: Baidu has agreed to partner with Western record companies to open up the Chinese music download market.

The Chinese firm, which controls nearly 80% of the Asian nation's search sector, has struck the agreement with Universal Music Group, Sony and Warner Music Group.

Under the terms of the deal, Baidu's MP3 and Ting users will get the opportunity to download music legally and for free. 

Meanwhile, the three record companies will grant Baidu a licence to access back-catalogues and new releases, including songs in Cantonese and Mandarin.

It is hoped that the partnership will help to reduce rates of illegal downloading.

Speaking to Bloomberg, Kaiser Kuo, a spokesman for Baidu, described the deal as "mutually profitable".

Both parties stand to benefit from increased ad revenues. This is in addition to the revenues the firms will receive from the licence fees.

Also speaking to the news agency, Ed Peto, managing director of Outdustry, commented: "Baidu will need to show sustained commitment over the coming few years before this deal can be seen as a proper watershed."

Google remains Baidu's closest competitor in the Chinese internet search-engine market. The US search firm launched a music service in China in 2009. 

Recent data show Google losing ground to Baidu in China in the second quarter, with the firm's search market share falling to 18.9% from 19.2%.

Data sourced from Bloomberg and Music Week; additional content by Warc staff