Baidu signs music deal with 3 majors and offers 500 000 songs on Ting

19 July 2011 9 h 04 min 16 comments

On 18th July, Baidu, the dominant Chinese Internet search engine, announced a major licensing deal with three of the world’s largest music companies that would allow Chinese Web users to legally download and stream hundreds of thousands of songs free.

The agreement between Baidu and One-Stop China, a joint venture between the Universal Music Group, the Warner Music Group and Sony BMG, will shut down access to a vast amount of pirated music, and promises to broadly reshape the way China’s 450 million Web users access online music.

The country has long been a heaven for pirated content with the strong support of Baidu. In February, the US trade representative named Baidu as one of the world’s 33 “notorious markets” for piracy and counterfeiting, especially because of Baidu’s practice of “deep linking”, or providing search results that direct users to unlicensed songs on other Web sites. The International Federation of the Phonographic Industry, which represents global music companies, estimates that 99 per cent of the music found online in China is illegal.

Over 500 000 songs on Ting

Under the two-year deal, the three music labels will license over 500,000 songs, about 10 per cent of them in Mandarin and Cantonese, which will be stored on Baidu’s servers and available for free streaming and download on the site’s ad-supported MP3 search page and social music platform, Ting.

Baidu will pay a fee to the labels each time a song is downloaded or played in a stream. It will also share revenue from online ads if it exceeds a certain amount, as well as provide promotional support for the labels. The companies declined to disclose financial details of the agreement.

“This deal connects One-Stop’s world-class repertoire of licensed music to a massive audience, creating crucial new opportunities for artists,” the joint venture said in a statement announcing the agreement. “All parties, especially music fans, will benefit from the growth of this type of compelling music service.”

Baidu said the agreement includes a conciliation agreement that ends outstanding litigation between the three record companies and Baidu. As part of the deal, the labels and Baidu agreed to a settlement endorsed by the Beijing Higher People’s Court ending all outstanding litigation.

 US$75 million China music market in 2010

According to the International Federation of the Phonographic Industry, even if China has more broadband connections than the United States, the global recorded music industry’s revenue in the country for 2009 was worth just US$75 million, compared with US$4.6 billion in the US, according to the federation. Digital sales accounted for 76 per cent of the country’s legitimate music revenue in 2010, compared with just 29 per cent globally, where CD sales remain dominant.

Baidu has now agreed to remove all deep links to music belonging to the three labels, though a small amount of other independently loaded music may remain available. “We’ve never wanted to stand there and thumb our noses at the recording industry,” said Mr Kaiser Kuo, Baidu‘s director of international communications. “This is a watershed moment. It’s a great way for us to deliver the best possible user experience by providing free and high-quality music and brings obvious tangible benefits to all parties involved including the labels, artists and advertisers.” “We’re delighted with this because it means Baidu is genuinely partnering with us to move China’s legitimate music market forward,” said Mr Max Hole, chief operating officer of Universal Music Group International.

Later this year, as part of the agreement, Baidu plans to introduce a premium fee-based service which will let paying users download music onto any computer, tablet or mobile device from a virtual storage locker.

Baidu is not the only on operator to tap digital music market. China Mobile made over US$2 billion from its licensed ring tone service in 2009 alone, giving record companies a cut of the purchase price. Google in China offers more than a million songs for free through download and streaming and shares ad revenue.

Baisu press release

SOURCES: Baidu,, NY Times, (19/07/2011) 

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