Google + China + Free Music = A New Business Model for Online Music Distribution?

News reports indicate that Google will begin providing free music downloads in China.

Apparently Chinese Internet users have grown so accustomed to downloading music online, that piracy and illegal downloading has impacted music sales there more than even what the RIAA claims to be such a huge problem here in the U.S. Relatedly, Google has been struggling to take market share away from Baidu, the leading Chinese search engine.

The win-win solution seems to be for the music companies to join forces with Google to create a free music download option for the Chinese market. In the deal, Google will start directing music searchers to, a Chinese Web site in which Google owns a stake, which will provide free downloads that have been properly licensed from music industry. will sell advertising on its website, and the music industry will reportedly earn 50% of that revenue. Google hopes to get increased search activity due to the lure of free (and better quality?) downloads.

The obvious question: if this business model is good enough for the 300 million Internet users in China, why not adopt a similar model for the 300 million users in the EU, or the 220 million in the U.S.?


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