According to the IFPI, an organization representing the recording industry worldwide, 99 percent of music downloads in China are illegal. In such an unfriendly environment, how can record labels survive?
Google’s answer to the question is its new Music Search feature. Chinese users of Google Music Search can download free tracks and preview music from the partner, Top100.cn, while Google profits from ads on search results. According to The New York Times, “About 84 percent of China’s nearly 300 million Internet users download music over the Web, and most of it is used for cellphone ring tones.”
Google believes that Music Search will help it compete with Baidu, a dominant search engine in China that earns the majority of its traffic from music searching. However, most music files downloaded through Baidu have been illegal. From Google’s music search engine, users can get authorized, high-quality files from record labels such as EMI, SonyBMG, Universal and Warner Music.
Record labels seem confident about the new deals with Google. Sandy Monteiro, a senior vice president at the Universal Music Group, said “The level of online advertising in China is quite mature, so we’re willing to try this out.”
Google Music Search with free downloads is only available in China. It was launched seven months ago, and The Wall Street Journal reports that five advertisers have committed $370,000 to the music service. But these numbers are still far from Google’s goal: 30 advertisers, some of them paying $1,000,000 within six months. However, there is potential for growth. Five million songs have been downloaded per day through Google’s music service in China. This number shows that the service is popular with Chinese users.
Baidu has reacted by announcing a partnership with Qtrax, an ad-supported music-downloading service. Now Google won’t be the only provider in China of free, legal online music, and the competition has intensified.
According to TechCrunch, MySpace may move to a pay model; its revenue from advertising does not currently offset its costs of streaming music for free. It’s still hard to tell if an ad-supported music service could profit. However, the proliferation of online music downloads in China has led to a new business model for music distribution.
References:
Google and Music Labels Bet on Downloads in China
Baidu Partners With Qtrax For Ad-Supported Music Downloads
Early Results From Google’s China Music Service
Imagine resource: http://www.google-kai.com/free-google-music-mp3-search-in-china.html
9 Comments
I am still don’t very understand how Google to make money through this Free Music Search Engine. Or what it want to do is to attract more traffic to its website?
However, there are two points in this article I have different ideas.
First, it discusses about the illegal download in China. In China, the copyright policy is quite different from here, which is more incomplete and limited. People’s idea about loyalty free product is weak. So, I don’t think that people will go to Google music just for it is legal. In China, people don’t judge things with legal or illegal issue, but with moral or immoral issue.
Second, I think Baidu is no longer a domain music search engine in China, since a lot of software has the ability to search music and download music, which is more convenient to use. TTplayer, a kind of music player software, is popular in China. It contains music search engine and download function itself. Besides, it will show you what is hottest and latest nowadays. As to some person, who are fans of music. They would go to the easyMule or other resources sharing website to find some high-quality music.
As the article say, the level of online advertising in China is quite mature. And free music in China is mature too. But of course, Google can attract traffic to its music research engine because of its reputation. However, I don’t think it is as easy as the article say.
Li Li makes an interesting comment that people in China don’t make judgements based on whether something is illegal or legal, but rather by moral or immoral. We would like to think that our laws reflect moral behavior, but in the case of online music a lot of people don’t consider it stealing. This is one of the root causes of illegal downloading, most people don’t see anything wrong with it.
Recording companies suffering. People aren’t readily willing to start paying for something they have been receiving for free, so how does the industry re-earn some of the lost income? Advertising on search on engines. Even though people may not go to Google just because it’s legal, if they can drive enough traffic to their website to at least compete with Baidu it will shift a large amount of China’s music downloads from illegal to legal, while gaining profits from advertising as well.
I believe China IS cracking down on illegal downloads by the end of the year- this month… if that is true, then legal vs. illegal will be more important…
Li Li’s comment on how, “In China, people don’t judge things with legal or illegal issue, but with moral or immoral issue,” really makes me wonder where morality in China lies. My question is what will it take to get people thinking that illegally downloading music is immoral? I think the fact that not only are people stealing, but also record companies are losing money constantly on a daily basis having to lay people off of jobs makes illegally downloading a moral issue. China has the worlds largest population, and when “99 percent of music downloads in China are illegal,” its going have a huge effect on the recording industry.
As far as Google’s new music search feature, it has an incredible amount of potential to try an succeed, but I do think Google faces an uphill battle. People will only use it if it is easier then the status quo, which right now is using Baidu. The advertisers for Google will only come if the numbers come, and for that to happen, Google has to make it easy for people to use.
I don’t think Google would compete successfully with Baidu by launching a free music search and download system. Even though the music searching is an attractive feature on Baidu, the key to success for Baidu is that it is more appropriate and suitable to Chinese culture customs while Google is kind of international media platform.
If Google really want to beat Baidu, what it needs is focusing on the culture core instead of technology core.
Speaking of free music downloading, it reminds me Anderson’s Free. Free is a creature of this information networked age, free is the hallmark of Internet, free is everywhere, free is a new economy.
The old times laws of copyrights, will they still be applicable for today? I highly doubt that.
This perspective comes from my experience living in big piracy markets in Latin America…
The moral or immoral discussion can be very subjective. However, objectively, under the Economics theory, piracy markets are just one point of equilibrium in a market of free competition. Prices of music and movies in the piracy market result from the interaction an unsatisfied demand (given high prices of the legal market), and illegal supplier (pirates) with almost none entry barriers that are willing to met the market needs at the price they are willing to pay. Then, the possible avenues to protect the legal distribution of music and movies are:
a) Increase the entry barriers for pirate suppliers (i.e. More strict laws, more investment in control of piracy distribution, higher taxes to blank DVD/CD and technology to reproduce them, etc). However, given piracy is so broadly dispersed in the market (many mini producers) the cost of controlling will be most likely larger than its benefits.
b) Legal suppliers offer a relevant value proposition to consumers so they can actually compete with piracy, not necessarily in price, but in quality, assortment, availability, etc. What about moving away from offering the physical good (DVD/CD) to online access to content, this could decrease production costs. Any alternative is better than what legal trader have today in their hands in emerging markets, a nil business.
-ADR
To Li Li,
Thanks for bringing different ideas. Google tries to gain more traffic since lots people search music online. Then it sells ads on search results and shares revenue with labels. Music files from Google are not only legal, but also high-quality and safe files than those unauthorized files. But it is challenging since there are too many tools for downloading.
To Elliott,
I saw that news, too. Some BT websites in China have been shout down recently. http://torrentfreak.com/chinese-authorities-shut-down-bittorrent-sites-091207/
To Anna,
Right, copyrights is dying. However, companies like Google still needs to follow it before it is gone totally or the service will gets in trouble, especially for international services.
Thanks for this post Pei.. I liked it a lot.. I also would like to ask if it’s not a question of legality but of morality then on what basis are our notions of legality built upon? If indeed downloading music illegally is in fact immoral and people agree with it being immoral does it necessary mean that people will stop downloading?
It is interesting to see how different people from different countries/cultures react to this subject reflecting differences in thought, culture and education.
Что то в верхнем углу высплыло, и Каспер показал что сайт заражон вирусом,
аффтар, да у тебя iframe вирус …