China's Baidu launches online music service

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Chinese search engine Baidu said Tuesday it will distribute music from three major firms online, ending a prolonged legal battle over copyright infringements.

One-Stop China, a joint venture of Universal Music, Warner Music and Sony Music, has agreed to license catalogues and tracks to be streamed or downloaded from Baidu's servers, China's most popular search engine said in statement.

Baidu will pay the content owners on a per-play and per-download basis for all tracks delivered through its MP3 search service and its newly-launched social music platform ting!, it said, without providing any financial details.

The deal ends all outstanding litigation in the long legal battle between the three record companies and Baidu, which was accused of providing links for users to download pirated music.

In 2008, Universal, Warner and Sony Music sued Baidu for at least 63.5 million yuan ($9.8 million) in infringement damages in China.

This year the US trade representative included Baidu as one of the world's top online and physical markets for pirated and counterfeit goods.

Baidu has 75.9 percent of China's Internet search engine market, according to the latest figures from Analysys International, and experts said the deal gave the three music companies valuable exposure to Chinese web users.

"The profit-generating mechanism of the music industry has changed," said Sun Peilin, a Beijing-based analyst with Analysys.

"What the record companies value in this cooperation is the promotion of their singers from Baidu's substantial influence among Chinese Internet users."

Sun said the deal showed Baidu was keen to mend fences with content providers after its reputation was tarnished in a high-profile row with Chinese writers over pirated content provided by its online library service.

In March, the company deleted nearly three million works from its online library after more than 40 Chinese authors signed a letter criticising it for providing their works as free downloads without permission.

A Shanghai court in May ordered Baidu to pay damages of more than $75,000, the maximum penalty available, to a literary website for violating the company's copyright.

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