China’s Road Forward
China’s music industry is immense and has enormous potential. It has over six hundred million users of mobile phone and counts nearly five hundred million web surfers. Its Internet market is the largest in the world. Yet digital distribution is largely unmonitored, and in general the market is so unregulated that illegal downloading of music is rampant.
In spite of its vast usage, China does not rank among the top five digital markets. By share of value, the US (39%), Japan (19%), UK (16%), France (12%), and Germany (9%) far exceed China, which is aggregated into a Rest Of World category that represents half of one-tenth of all digital music sales. The International Federation of the Phonographic Industry (IFPI) estimates that nearly 99% of all music downloaded in China is done so without proper clearance.
In an attempt to take advantage of a later correction in the sales of digital music, Google Music Search was launched in March 2008. Released exclusively in China, this new service is a platform that offers free, unlimited music downloads from most major labels. Google seems to be saying, “let’s join the pirates”—and so gain a foothold in a market that is likely going to be ebullient as time goes on. Ironically, since Google’s service is only available in China, music consumers around the world have been highly vocal about bringing the same service to their respective countries.
Google Music Search and Baidu
In fact, Google’s Music Search was launched to directly compete with the number one local search engine, Baidu. Baidu grants millions of users access to illegal downloads. Instead, Google Music Search also allows users to download unlimited free content, but it is completely legal. Google’s music catalog is limited, however, with only 1.1 million songs. Since Baidu has been in operation for longer, it can offer hundreds of millions of songs to download, which is much more enticing to music consumers. Furthermore, Baidu’s search engine gives users multiple download links of the same song, as well as different file format options (wav, mp3, aiff). Baidu’s advantages have made the site hugely successful in maintaining its large Chinese user base and trumping Google Music Search.
Continue Reading on the Music Business Journal’s Website…
