China’s largest search engine, Baidu Inc has collaborated with top music studios to distribute licensed songs via its mp3 search service. 

Baidu has signed a deal with One-Stop China, a joint venture by Universal Music, Warner Music and Sony Music, for its catalogues and new releases that can be downloaded from Baidu’s servers. This ends a legal dispute over accusations that the company encouraged piracy. 

This deal seems particularly significant for the recording industry that has seen little profit in China where pirated movie DVDs and music recordings are sold for under a dollar. China’s 470 million internet users will soon be able to legally download more than half a million songs from Baidu’s servers as well as Ting, Baidu’s new social music platform.

Baidu Inks Music Deal

Baidu Inks Music Deal

Under the terms of the deal, Baidu will compensate music owners on a per-play and per-download basis for all tracks delivered through its MP3 search and Ting platform. The licensed music will be supported via advertising and the music studios will receive a minimum revenue guarantee against the songs streamed or downloaded. If the advertising revenue exceeds that amount, a revenue split will kick in. If it doesn't, Baidu will still make the payout.

This move looks promising for the development of a legitimate digital music business in a market that has for years been largely dominated by piracy