Baidu and EMI Music have agreed on a deal to launch an ad-supported streaming music service to Chinese users. Under the terms of the deal, Baidu will set up a page entitled the “EMI Music Zone” as part of its music search channel.
Chinese users will be able to listen to music for free on Baidu while viewing various types of advertising. Baidu and EMI will share equally in marketing revenues generated from the service.
An MSNBC article expounds on the business trend of partnering with domestic companies in China, such as Baidu, to offer products and services to the population:
The desire to do business in China may seem like a no-brainer for many companies, but some are finding it trickier than expected. Baidu’s huge popularity in China has established the company as a powerful partner for foreign firms seeking exposure to the nation’s large and growing Internet audience, which should make it a stock worth watching in the years to come.
As for the music industry, given the trouble it’s had adapting its business model to the digital age here in the U.S., I can’t help wondering whether it’ll be forced to adopt even more creative strategies to thrive in China.
Baidu boasts greater than 60% of all search related traffic in China, which makes it one of the prime conduits through which to work in trying to market to the Chinese consumer base.
China is also a hotbed of piracy, so the major record labels are left with few options when it comes to the country’s domestic market. Instead of wasting resources in an effort to combat piracy, Baidu and EMI are working to find ways to appeal to the public by also offering free content with an alternative method of monetization.
If only the record labels in the United States had this kind of mentality.
I suppose, however, that’s just wishful thinking on my part.
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Joe is a staff writer for Murdok. Visit Murdok for the latest ebusiness news.
