It’s no secret that China is the next big market on the world stage. Following the success of the Olympic Games and the high profiles achieved by major sponsors, many international companies are looking to Asia to expand their reach among China’s 1.6 billion consumers. Google has long played second fiddle to China’s top search engine, Baidu.com, partially because of a controversial music download policy. Baidu provides music searches leading to free, unlicensed downloads, and Google has been hesitant to follow the tricky legal path that its rival has.
Google has now made a move to compete with Baidu, offering searches for free, licensed music downloads for Chinese users. After intense negotiations with music companies, Google will partner with Top100.cn to provide music searches, listening samples, and legitimate free downloads. The service, called Music Onebox, will not only keep Google out of legal trouble, but will also be the first music search service the company will launch anywhere in the world.
As the Wall Street Journal recently reported, “Industry analysts have estimated that as many as 90% of Internet users in China – which now has the world’s largest population of Internet users – download unlicensed music online everyday via search-engine services that provide links to unlicensed music downloads.” Google’s partnership with Top100.cn will offer music from international record labels such as Vivendi SA’s universal Music, EMI, and many other Chinese record labels. The website will be supported by advertising, and revenue will be split between the participating record companies, Top100.cn, and Google.
In addition to providing free downloads for users, Google’s service will create an opportunity for music marketers to collect data about those who use the site. The Wall Street Journal explains, “The search would also provide information about artists and albums from Top100.cn’s database for free. Watermarking technology would be used to track downloads for meaningful statistics for use in selling advertising.” For example, if users are downloading Led Zeppelin songs in record numbers following Jimmy Page’s performance at the closing ceremony of the Olympics, advertisements for other 70s rock band’s albums might be served to those users.
Music Onebox will only be available in China for now, and no plans have been announced to spread it beyond the growing nation. The service may give Google the edge it needs to compete with Baidu, but it will also provide an above-the-table way for music downloads to be rolled out in China. In a market notorious for piracy, offering legal downloads in exchange for advertising revenue could be the solution to the poor performance of record labels. If the system works in China, it could work anywhere.