China’s largest search engine, Baidu has long been the scourge of record companies, who criticize the site for providing easy access to illegal music downloads. The International Federation of the Phonographic Industry (IFPI), which represents Sony BMG, Universal and Warner, filed suit against Baidu, but in 2006 the Beijing courts sided with the search engine, accepting the argument that it’s not a crime to provide access to illegal downloads from a third-party.
In June, a number of Chinese and international recording industry groups including the IFPI and the Music Copyright Society of China, called Baidu “the largest and most incorrigible purveyor of pirated music in China,” and called for an industry-wide advertising boycott, according to Variety Asia. As the search engine dwarfing all other search engines in China, Baidu’s role in music piracy makes it difficult for other sites to go the legal route. Baidu’s illegal downloads give it a leg-up over Google China, and suffocate local paid-download business models. “Baidu is at the root of the problem of illegal music downloading, Wu Duanping, chief executive of online music seller Zheliang Flyasia Electronics Business Co., told Business Week last year.
A result of continued pressure from IFPI and other music organisations, a couple weeks ago Baidu announced a new partnership with three major Chinese record labels: Emperor Entertainment Group, Ocean Butterflies Best Hits Karaoke, and Shanghai Huayi Group. Baidu will stream licensed versions of these companies’ music through its advertising-supported Baidu Digital Music League, which reportedly just landed a 10 million RMB advertising contract.
The deal is a signal that music pressure groups’ efforts over the past few years have not been for naught, though it remains to be seen how much the Baidu Digital Music League will chip away at the wide availability of free mp3s for China’s netizens. Leong May See, IFPI’s Asia director, estimated last year that nearly 100% of China’s online music downloads are unlicensed. It’s encouraging to see Baidu taking steps to tip the balance the other way.
Lest we get carried away with plaudits of Baidu, Music 2.0 blogger and digital music maven Maths has a sobering take on the whole thing:
Baidu claims to have lined up an advertiser willing to put up more than RMB 10 mil but has not even mentioned the advertiser’s name – and it is open to question if this advertiser even exists. In all probability, this announcement was a blatant attempt to deflect the music industry alliance’s call to advertisers to boycott Baidu. It is most likely that Baidu is actually dipping into their huge revenue pool and taking out a small portion of their money to give to these 3 labels…So Baidu is simply buying off 3 labels with expensive advances rumoured to be in the seven figures simply to boost their position in the impending legal cases and to subvert public opinion. In fact, unless they extend similar revenue share deals along with compensation to all other affected labels for the sustained acts of infringement over the years, the true significance of this announcement is that their advances to these three labels have instead just created a precedent for suitable compensation claims for each label suing Baidu currently!
As with any multi-million dollar enterprise, it’s safe to assume Baidu doesn’t do anything altruistically. The true test will be the long-term viability of the Digital Music League, Baidu’s level of transparency about the details of its operations, and whether Baidu chooses to expand it beyond these three record labels. However the cookie crumbles, hopefully the new partnership will remind other conduits of internet piracy that they can’t operate with impunity.