Baidu (BIDU) Cleaning Up with New Music Service
Down)
Baidu (Nasdaq: BIDU), a Chinese company riddled with accusations of illegal download, has now begun its redemption.
The Beijing, China-based search giant, generally referred to as the "Google of China," announced it has entered into a joint venture with a group consisting of Universal Music Group, the Warner Music Group (NYSE: WMG), and Sony BMG (NYSE: SNE), called One-Stop China.
With Baidu being accused of facilitating music piracy in a country which generally turns a blind eye to counterfeit products, this is a big step for Baidu. It's agreement with One-Stop will be for two years and licensing will be for just 500,000 songs to start. Users will be able to stream the media, 10 percent of which is expected to be in Mandarin and Cantonese, while visiting it's ad-supported site, Ting.
When a song is downloaded or streamed, Baidu will pay a fee to the labels, not uncharacteristic of other media agreements. A portion of a purchased song will also be paid out by Baidu.
To an outside observer, this may seem like an uphill battle. With about 99 percent of the music in China being transmitted and used illegally, what is 500,000 tracks going to change?
An image, for one. Baidu was listed in the U.S. as one of the world's "notorious markets" for piracy and counterfeiting. There were only 32 others on the list. Additionally, the new agreements will have the three major labels dropping litigation previously held against Baidu.
Baidu will now aim to mimic Pandora (NYSE: P) and Spotify with a streaming and downloading service available in mobile devices and PCs. Maybe -- if we're lucky -- it'll create a social networking site, too.
Shares are up 1.4 percent on the session.
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The Beijing, China-based search giant, generally referred to as the "Google of China," announced it has entered into a joint venture with a group consisting of Universal Music Group, the Warner Music Group (NYSE: WMG), and Sony BMG (NYSE: SNE), called One-Stop China.
With Baidu being accused of facilitating music piracy in a country which generally turns a blind eye to counterfeit products, this is a big step for Baidu. It's agreement with One-Stop will be for two years and licensing will be for just 500,000 songs to start. Users will be able to stream the media, 10 percent of which is expected to be in Mandarin and Cantonese, while visiting it's ad-supported site, Ting.
When a song is downloaded or streamed, Baidu will pay a fee to the labels, not uncharacteristic of other media agreements. A portion of a purchased song will also be paid out by Baidu.
To an outside observer, this may seem like an uphill battle. With about 99 percent of the music in China being transmitted and used illegally, what is 500,000 tracks going to change?
An image, for one. Baidu was listed in the U.S. as one of the world's "notorious markets" for piracy and counterfeiting. There were only 32 others on the list. Additionally, the new agreements will have the three major labels dropping litigation previously held against Baidu.
Baidu will now aim to mimic Pandora (NYSE: P) and Spotify with a streaming and downloading service available in mobile devices and PCs. Maybe -- if we're lucky -- it'll create a social networking site, too.
Shares are up 1.4 percent on the session.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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