Summary:

While everyone’s attention was focused on Spotify finally launching services in the U.S., another online music milestone has been reached on…

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photo: Baidu

While everyone’s attention was focused on Spotify finally launching services in the U.S., another online music milestone has been reached on the other side of the world. China’s search giant Baidu (NSDQ: BIDU), long accused of aiding and abetting music piracy, has finally inked a deal with major music labels that finally gives it access to legal MP3s for both its music search service and Ting, a new “social music” service that Baidu launched today. Ironically, though, it appears that Baidu is still including illegal tracks in its search results, when users search for a specific MP3.

Baidu, which currently controls over 75 percent of the Chinese search market, has not signed deals with individual labels for the service, but has inked one deal with One-Stop, a joint venture from Sony (NYSE: SNE) Music, Warner Music and Universal Music, according to a release from the company. Baidu had already had a pre-existing relationship with EMI.

The One-Stop deal gives Baidu access the three labels’ back catalogs and new releases, covering both Chinese and international tracks. These can be streamed or downloaded.

Baidu will play content owners on a per-play and a per-download basis, wither it is via its MP3 search service or via Ting, Baidu’s new streaming platform that lets users discover and share music.

The One-Stop agreement will mean a cooling off of some of the legal heat on Baidu: Reuters notes that the deal comes with a “conciliation agreement” that effectively ends all outstanding litigation between Baidu and the labels, which have for years been trying to stop the leading search portal from making it easy for users to find and download pirated music.

But strangely, the piracy problem doesn’t appear to be completely out of the picture. While Baidu is loading the catalogs up to its services, and has removed hundreds of thousands of links to pirated tracks, it is still offering search results for music that is not legal, according to the Reuters (NYSE: TRI) report. We have contacted both Baidu and One-Stop for comment and will update as we learn more.

China has already proven itself to be a huge market for online music. Of the 470 million people who were online in 2010 in China, some 362 million used some form of online music. But in a country that is one of the worst offenders for pirated music, labels have seen practically no revenues as a result of that activity.

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