Search engine makes an agreement with international record companies

BEIJING - Baidu Inc, China's biggest search engine by market share, has reached an agreement with three major international record companies to provide licensed digital music, a move to clear itself of any involvement in copyright infringement and fuel the growth of the online music market.

Baidu users will be able to stream and download music from Universal Music Group, Warner Music, and Sony Music Entertainment, the search engine said in a news release on Tuesday. Baidu will pay the record companies for each play and download on its music search service and Baidu Ting, a newly launched social music platform.

Baidu Inc's Shanghai headquarters. Baidu users will be able to stream and download music from Universal Music Group, Warner Music and Sony Music Entertainment, the search engine said in a news release on Tuesday. [Photo/China Daily]

"I'm confident that Baidu, the Chinese music fans, recording artists, and the record companies will all benefit from this partnership," said Jennifer Li, Baidu's chief financial officer, in a news release.

Baidu has been widely criticized for its music search service, Baidu MP3, which directs users to content that infringes on copyrights. Another service offered by the search engine, Baidu Wenku, where users can read, download, and share documents and books free of charge, was also accused of copyright infringement this year.

The search engine said in May that it will offer only licensed digital music in the future, through Baidu Ting, according to Catherine Leung, general manager of the company's digital entertainment business.

Leung also said then that she hoped Baidu Ting could generate revenue through subscriptions, advertising and other means.

The launch of Baidu Ting and cooperation with record labels is seen as Baidu's move to take on rivals who have been involved in social music for some time, said analysts.

"Baidu relies on huge traffic to generate revenue, and the loss of online-music traffic means a loss of revenue," said Sun Peilin, an analyst with the research company Analysys International.

However, he added that Baidu may face a difficult time competing with rivals, for example, Tencent Holdings Ltd, because their social music services have attracted many users who may not want to move to new music websites.

Google Inc, another rival, also provides licensed online music service in China through its partnership with Orca Digital, a company co-founded by the basketball star Yao Ming.

Orca Digital is said to be planning a public listing, according to media reports, but Gary Chen, chief executive officer of the company, declined to comment in an interview with National Business Daily.