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Google launches free online music service in China

Web users will be able to download and save songs from Warner, Sony, Universal and other labels, which will get a share of ad revenue.

March 31, 2009|Bloomberg News

Google Inc. has started a free online music service in China, a market with almost 300 million Web users.

The service allows users to download and save songs from Warner Music Group Corp., Sony Corp., Universal Music Group, Broadcast Music Inc. and 140 other independent labels, Google said Monday.

Google's music offering helps it match services provided by Baidu.com Inc., which has more than double the market share of the Mountain View, Calif., company in China.

The record companies will get a share of revenue from advertising sold on the music website, generating sales for them in a market where 99% of all downloads are illegal, according to the International Federation of the Phonographic Industry.

"It's really a case of innovate or die for the music companies in China," said Duncan Clark, chairman of Beijing-based research company BDA China Ltd. "It's hard to get the younger generation to pay for music."

Google's service, which is also being provided in cooperation with the Chinese music website Top100, currently has 350,000 songs available for download. That number will be increased to 1.1 million, said Gary Chen, chief executive of Top100.cn.

Baidu enables users to find unlicensed copies of music offered for download on non-affiliated third-party websites via its search engine, a service Google doesn't offer. Warner Music, Universal, Sony and other record companies have sued the search engine, alleging it violates copyright.

Beijing-based Baidu increased its share of China's paid-search market to 62.2% last year from 59.3% in 2007, according to research company Analysys International. Second-place Google's market share rose to 27.8% from 23.4%, according to Analysys.

Warner Music, Universal, Sony and EMI Group Ltd. sued Baidu in 2005 for copyright violations and lost. A Beijing court accepted a lawsuit in April 2008 by the International Federation of the Phonographic Industry on behalf of Universal Music, Sony and Warner Music seeking $9 million in damages from Baidu.

EMI, which wasn't involved in the second suit, began an online music service with Baidu in January 2007. Users aren't allowed to download the tracks onto their computers.

EMI, Sony and Warner Music signed a similar agreement to offer music via Sina Corp., the owner of China's biggest Internet portal, in March 2007.

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