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Business News Deals Digital Labels & Publishers Top Stories
Baidu announces deal with record labels
By CMU Editorial | Published on Tuesday 19 July 2011
China’s largest search engine Baidu this morning announced it had signed a deal with an agency representing three of the major record companies, Universal, Warner and Sony, which, it says, will now enable it to offer a fully licensed MP3 service.
For a time Baidu was on the Western music industry’s most hated list, because of its MP3 search service, which provided easy access to thousands of MP3s, nearly all emanating from illegal sources. The record labels tried to shut down the MP3 search part of Baidu’s service through the Chinese courts, but the web firm persisted.
But then, earlier this year, presumably motivated by moves by the Chinese government to crackdown on internet piracy, Baidu started talking to rights owners about them licensing various music services. And in April it said it had a deal in place with the Music Copyright Society Of China, which represents the interests of music publishers.
This morning it announced a deal with an organisation called One-Stop China which, according to reports, is a joint venture between Universal, Warner and Sony. Under the deal the record companies will earn a royalty every time Baidu users play or download a track via the web giant’s platform. The deal will also licence Baidu’s previously reported new music service ting!, which seemingly has social networking elements in built too.
The terms of the licensing deal are not known, of course, though presumably Baidu will be paying a fraction of what its counterparts in the West do for the music they licence, though rights owners will recognise that any income from a market where piracy has always ruled is a welcome development. And given the size of the Chinese market, decent revenues could still be made from tiny per-play or per-download royalties. Presumably Baidu will cover the costs through ad sales.
The web firm added that as part of the deal past legal disputes between Baidu and the record companies had been resolved, and that that out of court settlement had been approved by the Beijing High People’s Court.
