Google China to Take on Baidu with Free MP3s

The success of Baidu, China’s leading search engine, can be attributed largely to its generous offering of MP3s - both legal and illegal - in its query results. But Google’s set to change all that, reports the Wall Street Journal, in an effort to boost its lackluster performance in the Chinese market. With the support of some of the world’s biggest labels (so far, Universal is confirmed, with EMI Group Ltd. and Sony BMG Music Entertainment at the negotiation table), Google China is hoping to close the gap between itself and Baidu by offering its own free, legal MP3 search results, along with “free access to a database of information about their favorite artists — from concert listings to links to special ring tones,” says the WSJ. The article continues to explain Google’s intended approach:

Google’s new China strategy is widely viewed as a logical next step for digital music, but has until now been resisted by record labels, which feared further cheapening the perceived value of their products. Experimenting with such a system in China, where a legitimate music market is virtually nonexistent, could be a palatable entryway…

[Google will be] offering high-quality music files embedded with a digital “watermark” that lets record labels track how often their songs are downloaded. The idea: Better-quality files will draw users away from unlicensed downloads, and give labels and search companies valuable data needed to make money from advertising, say people familiar with the plans.

In a country where 90% of its 210 million web surfers access pirated music daily, labels are forced to relinquish the hope of fitting old industry paradigms into the digital world and pushed to innovate (… not that teaming up with Google is so bad a fate). If Google’s plan works in China, it would be setting a significant precedent in the industry, drastically changing the relationship between musicians, labels, fans, and the means by which they all connect. But will it take near bedlam in every country’s music marketplace for industry giants to give up the ghost and follow Google China’s lead?

WSJ: Google Aims to Crack China With Music Push