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April 7, 2009

gTunes — At last, free legal music downloads (that's the good news)


The bad news: You have to be inside China to use the new offering from Google.

Here's David Barboza's article from yesterday's New York Times Business section about the service, announced last week.


Google Offers Links to Free Music Downloads in China

Trying to gain ground in one of the few markets where it is behind, Google said Monday that it had begun to offer in China links to free music downloads, a service it does not offer anywhere else in the world.

Google executives said they were responding to the phenomenal popularity of free music downloads in China and were acting legally by forming an alliance with the music industry, including Sony BMG Music Entertainment, EMI Group, Universal Music and the Warner Music Group.

Google said it hoped the demand for music downloads would raise its profile in China, which has already overtaken the United States as the world’s biggest Internet market with nearly 300 million users. It is also aiming to gain market share against its chief rival here, Baidu, the country’s dominant search engine.

“This is a huge leap of faith for us,” Kai-fu Lee, the president of Google Greater China, said by telephone. “We hope this will move the landscape to a legal model.”

The deal, which was announced at a news conference in Beijing, is significant for Google and the global music industry because Chinese consumers spend so much time searching for and downloading unlicensed music, often to use as mobile phone ring tones.

Richard Ji, a technology analyst at Morgan Stanley, called the agreement a milestone for cooperation between portals and the music industry. He also said that music and video downloads would grow even more important with the release of more 3G multimedia offerings.

Baidu, which has about 62 percent of the Chinese search engine market, has grown partly by offering music search services and linking to sites that offer free downloads of music.

By comparison, Google — which until now has not offered links to free music downloads — has only about 28 percent of the search engine market in China, according to Analysys International, a Beijing research firm.

Saying they are losing a great deal of money in China, the big global music companies have sued Baidu in a bid to stop it from linking to Web sites offering unlicensed music downloads. But Baidu has defended itself, saying it is simply offering search links. The cases are pending.

Baidu also says it has its own revenue-sharing deals with 100 record companies, though most of the world’s big record companies are not part of that agreement. Last December, the company hired Catherine Leung, a former executive at Universal Music Group China, to head its digital entertainment division.

But on Monday, Google said it was determined to match Baidu, adding that it would offer Chinese consumers exactly what they want but would do so legally by striking a deal with a Chinese partner and the global music industry, including about 140 independent music companies.

The Google service allows Chinese consumers to search for music, link to the Web site of a Beijing company called Top100.cn and download licensed music from that Chinese site, which has signed contracts with the music industry.

Google hopes to gain market share in music search. Top100.cn will sell advertising on its own site to pay for more than 1.1 million songs it plans to offer to Chinese consumers. And the struggling music industry gets a new revenue source, sharing income with Google.

The IFPI, which represents some of the biggest music companies, estimates that 99 percent of the online downloads of music in China are illegal.

Mayseey Leong, the IFPI’s regional director for Asia, praised the Google deal.

“This shows you can do the right thing and still have a good service,” Ms. Leong said. “It’s going to be a legitimate service.”

Google also said its new service would offer high-quality music downloads and protect consumers from viruses and poor-quality recordings, which the company says are a problem with illegal sites.

Courtney Hohne, a spokeswoman for Google, said that the company had worked for a long time preparing the alliance.

Google officials said that searches for music dominate the Internet in China — even more than online games or news.

“Consumers spend so much time with music,” Ms. Hohne said. “Music was really the big piece that was missing for us.”


How's your Chinese?

April 7, 2009 at 12:01 PM | Permalink


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