Baidu signs internet deal with music labels

Baidu, the Chinese internet search company, has signed a deal with three major record labels allowing it to offer free music downloads to users.

The deal represents a coup for the company, which has beaten Western rivals such as Google to the punch. The US company, along with Amazon, recently announced the launch of a cloud-based music service that allows users to store music they already own. However, high financial demands on the part of the labels is believed to be behind a failure to reach a deal to licence music, meaning the Google service cannot be used to download tracks.

But the deal Baidu has signed with One-Stop China, a joint venture between Universal Music; Warner Music; and Sony Music, means it will licence back catalogues and new releases from the three labels, handing it an advantage in the potentially lucrative legal music download market.

Dan Cryan, the head of broadband media at the online analyst Screen Digest, said: "The potential for this to hurt Google depends on how likely Baidu is to break out of China. China is one of the few markets in which this kind of deal was likely to have been made because the culture of spending money on content online does not exist there in the same way as in the West."

The search engine will pay royalties on a "per-play and per-download basis". Downloads will be available via Baidu's advertising-powered Ting website.