Digital Music

Baidu, China’s Top Search Engine, Cuts Deal To Pay Three Major Labels

image from Baidu, the search engine that controls 75% of the Chinese market, has cut a deal to make payments to a joint venture created by 3 of the four major record labels. Universal, Warner Music and Sony will pay the labels on both a per-play and per-download basis. A recently created download store will serve as the sales hub.

China, the world's biggest internet market with 470 million users, has been notorious for digital media piracy with Baidu serach at the center.

It's a win for the three labels involved, but some wonder if Baidu can easily absorb the additional cost. "I think there will be a higher cost involved and I am not very sure they can generate the revenue," Wallace Cheung of Credit Suisse told the BBC.

“China has a long way to go yet, but the deal serves as a good baseline to work from,” Ed Peto, managing director at Outdustry, which represents western music companies in China told Bloomberg. “Baidu will need to show sustained commitment over the coming few years before this deal can be seen as a proper watershed.”

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