China's top search engine Baidu.com Inc put the finishing
touches on a deal with EMI Music yesterday as it tries to
legitimize its controversial online music search service. Under the
agreement, EMI Music will authorize Baidu's streaming of its
Chinese repertoire on Baidu's music search channel, with Baidu
sharing ad revenue in return.
The two companies also agreed to explore a free music download
Shawn Wang, Baidu's chief financial officer, stated the
cooperation would not alter Baidu's existing search services,
refuting speculation that it would cease including Web links in its
search results that enable users to download copyrighted music free
Baidu is the biggest player in the Chinese online search market
with a share of around 60 percent, triple that of second-placed
Google. Negative echoes emerged from experts saying a large part of
Baidu's market share is due to its music search channel, a
controversial service that has seen Baidu accused of copyright
"The cooperation is good news for Baidu and EMI Music, since it
will help Baidu ease increasing criticism of its music search
service and will help EMI to win a better position in the battle
against its competitors such as Sony BMG, Warner Music and
Universal Music," said Liu Bin, an analyst with BDA China.
EMI, the world's third-biggest music company with a catalog
including the Beatles, Coldplay and Robbie Williams, has suffered
from a downturn in popularity in recent years. It said its digital
music business represented about 9.4 percent of its music division
revenue, compared to an 11 percent industry average.
"The cooperation between Baidu and EMI also moves us towards
jointly controlling digital piracy, something that is important to
EMI in the Chinese digital music market," said Norman Cheng,
chairman of EMI Music Asia. "It is also part of EMI's strategic
roadmap to expand digital music development across the region,"
Last November, EMI and a group of leading international record
companies, including Sony BMG, Warner Music and Universal Music,
lost a lawsuit against Baidu accusing the search firm of engaging
in illegal downloading and playing copyrighted music.
Although the cooperation will benefit both Baidu and EMI, Liu
added that the advertising-supported free model of distributing
music would nevertheless hurt the existing music download
(China Daily January 17, 2007)