China's largest search engine Baidu said it will start paying an agency representing songwriters for every music download on the site, after years of being criticized for providing links to pirated music downloads.
On Friday, Baidu announced that it had made an agreement with the Music Copyright Society of China to establish a partnership to protect legal digital music, and will pay copyright holders to use their music. This will encompass any song that is downloaded from Baidu's music search site, said company spokesman Kaiser Kuo.
The payment will go to the Music Copyright Society of China. However, the money is only meant to compensate the songwriters behind the lyrics to the music, and not any major record labels as that would have to be made under a different agreement, Kuo said.
"We will also provide the [Music Copyright Society of China] playback and download data, so that they will be able to have some idea of what's actually being downloaded," Kuo said. Baidu also plans to establish a licensed content page on its music search site.
For years, Baidu has been accused of promoting piracy through its MP3 search service. Music groups have complained and said the service offers users "deep links" to free pirated music on third-party hosted sites. The Chinese search giant has faced lawsuits as a result, and even been named a "notorious market" by recent a U.S. government report.
Some experts say Baidu's MP3 search was a major factor behind the company's rise in China, becoming one of its most popular services. Baidu now has a 75.5 percent share of the country's search market, with Google a distant second, according to Beijing-based research firm Analysys International.
The Music Copyright Society of China has spent years trying to push Baidu to protect copyright holders, even taking legal action against the company, said Liu Ping, the vice general secretary for the group. But late last year, Baidu and the society began working an agreement to protect copyright holders.
"The changes Baidu is making could create a really wide-reaching music platform through the Internet that will lead to profits for those in the music industry," Liu said. "This has never happened before in China."
Mark Natkin, managing director of Beijing-based Marbridge Consulting, said of the new partnership, "It would certainly be good for the music industry and it would be beneficial for Baidu's reputation."
It's not yet clear how this will affect users, and if all the music downloads on the site will continue to be free. Local Chinese media reports have said Baidu will offer free and paid downloads in the near future.
Baidu could choose to shoulder the costs and make all the downloads free, in order to maintain the traffic volume on its MP3 search site, Natkin said. "The site is a very valuable for Baidu as an entry point. People will come there to search for music, and then use Baidu for Web search," he said. "It's an entry point to other Baidu properties that are monetized very well."