Summary:

After losing a Beijing court case in which they accused Baidu (NSDQ: BIDU) and Sohu (NSDQ: SOHU) of copyright infringement last year, record…

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After losing a Beijing court case in which they accused Baidu (NSDQ: BIDU) and Sohu (NSDQ: SOHU) of copyright infringement last year, record labels are now asking the former Chinese search site to comply.

Four of the industry’s main global umbrella groups have written a letter to the Financial Times (and sent to paidContent:UK, below) in which they say: “Baidu is the biggest source of this (piracy) problem.”

Baidu’s web search indexes links to MP3 files hosted elsewhere on the web. It evaded infringement culpability because it is not a host, but the 2010 ruling was interesting because, in a 2007 case, Yahoo (NSDQ: YHOO) China was convicted on copyright infringement for the same reason. The industry wants Baidu to filter music files out of search results.

“Baidu facilitates infringement through deep linking and it is such a major player in the Chinese internet market that it is difficult to see a thriving legitimate digital sector develop while it continues to do so,” a spokesperson for the International Federation of the Phonographic Industry tells paidContent:UK.

The music organisations have been in direct contact with Baidu but have taken this plea through the press, via the FT, because they feel Baidu downplayed the issue in a recent FT interview.

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From IFPI, CMIC, WIN and ICMP

Dear Sirs

Censorship is not the only issue surrounding China’s internet strategy (Leader article, March 23). The continued widespread abuse of the intellectual property of Chinese and international rights owners is a dark cloud hanging over the country’s e-commerce miracle.

Our organisations represent the legitimate music sector in China and internationally, comprising thousands of record labels and music publishers. Our members want to partner with and invest in China’s digital revolution, but they cannot do so while the music service run by the dominant internet company, Baidu, facilitates infringement of the rights of artists and creators online.

The legitimate Chinese music market is a huge investment opportunity that is waiting to happen. This is a country with twice as many internet users as the US, but where legitimate music consumption is miniscule, with digital revenues per user at less than 1% of the US equivalent.

Baidu is the biggest source of this problem, with its MP3 music search service estimated to be responsible for over 50% of infringing music distribution in China. It has the means to bring immediate change by proactively filtering infringing works from this service.

As one of China’s most successful companies with a growing profile internationally, Baidu will face increasing pressure on this issue in the coming months. This was demonstrated last month when the US Government highlighted Baidu in its list of “notorious markets”. The protests have been echoed in recent weeks by a coalition of Chinese authors and by Japanese book publishers.

Our members welcome the commitment of the Chinese government to improve enforcement of intellectual property rights. It is now time for corporate role models like Baidu to lead this initiative from the front.

Yours sincerely

Frances Moore, CEO, IFPI
Bill Zang, Chairman, China Music Industry Committee (CMIC)
Alison Wenham, President, World Independent Network (WIN)
Ger Hatton, Secretary General, International Confederation of Music Publishers (ICMP)

The International Federation of the Phonographic Industry (IFPI) China Music Industry Committee (CMIC), World Independent Network (WIN) and International Confederation of Music Publishers (ICMP)

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