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China’s Baidu inks deal with three major music labels

Baidu One-Stop China

China’s leading search engine Baidu has inked a deal with three of the four major music labels—Sony Music, Warner Music, and Universal Music—to launch a new digital music service in China. One-Stop China will be operated as a joint venture between the companies, and the three labels will be licensing their catalogs and new releases—including material in Cantonese and Mandarin—as well as international tracks. And the deal with Baidu also extends to Baidu’s MP3 search service and social music platform ting—the labels will be paid on a per-day and/or per-download basis for use of their material on those services.

“Baidu has always striven to provide the best possible experience to our users,” said Baidu CFO Jennifer Li, in a statement. “Our partnership with One-Stop China marks an exciting new beginning. I’m confident that Baidu, the Chinese music fans, recording artists, and the record companies alike will all benefit from this win-win partnership.”

Roughly half a million Cantonese and Mandarin tracks will be available via the service at launch, although One-Stop China expects that number to double as the service picks up new releases.

Pulling revenue from Baidu’s MP3 search service may be the most important immediate aspect of the deal for the music labels: music publishers have repeatedly sued Baidu for enabling piracy by providing searchers “deep links” to pirated online music, helping enable China’s vast market in pirated music. Now, not only will the labels receive revenue for tracks pulled from Baidu’s MP3 search service, but One-Stop China will represent a legal alternative to pirated music that, the labels hope, will begin to curb music piracy in China. And if a company the size of Baidu makes a commitment to legal music, maybe others will do the same.

Chinese Internet users can sign up for the service through ting. One-Stop China will initially be available for free to ting users—tin generates its revenue through advertising—although Baidu is also looking at offering additional paid services.

Baidu is China’s largest search engine, with an estimated 75 percent share of the Chinese market—which is the largest Internet market on the planet, with an estimated 470 million users.

Notably missing from the deal is EMI, the last of the “Big Four” music labels.

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