Record industry statement urges advertisers to spurn

PUBLISHED : Wednesday, 04 June, 2008, 12:00am
UPDATED : Wednesday, 04 June, 2008, 12:00am

Some of the world's largest record companies are calling on advertisers to stop using, saying the mainland's largest search engine encourages copyright infringement.

In a joint statement yesterday, the record industry urged all major corporations, including the advertising industry 'to support copyrights through practical action', and avoid providing financial support to copyright infringers. It pointed to Baidu as the biggest offender.

The action steps up efforts by the music industry against Baidu, which provides free downloadable music through its MP3 search services.

The statement was made jointly by three major industry groups - the Music Copyright Society of China (MCSC), the China Audio-Video Copyright Association (CAVCA) and the International Federation of the Phonographic Industry (IFPI). They were joined by domestic and international record labels such as Linfari Music, Universal Music, Sony BMG and Warner Music.

'Baidu is the largest source of pirated music in China,' said IFPI Asian regional director Leong May-seey. 'It has deeply hurt the industry.'

The IFPI estimated over 50 per cent of music piracy on the mainland came from 'deep-linking' sites, such as MP3 searches. Of those searches, 75 per cent came from Baidu.

'From its ever-increasing revenue, we can see Baidu is profiting from these kinds of illegal activities,' said Ms Leong.

Baidu's first-quarter profit increased 71.5 per cent to US$20.9 million as sales doubled to US$81.9 million.

'Baidu takes intellectual property rights seriously' and 'welcomes future co-operation with' recording companies, Baidu said in an e-mailed statement, according to Bloomberg.

The music industry's reaction was 'reasonable', said Jacky Huang, a senior analyst for digital media at IDC China. 'Baidu is using its advantages in technology and its huge user base to bully content providers [music companies]. It should at least share part of its revenue with the content providers.'

The IFPI sued Baidu on behalf of record companies Universal Music, Sony BMG and Warner Music for copyright infringement in April. It is seeking damages of US$9 million, the most asked for by record companies on the mainland. They also sued another search engine, Sogou, on similar charges for US$7.5 million. Sogou is run by the second-largest mainland online portal, Sohu.

Beijing courts will hear the Sogou case on July 9 and Baidu's on July 10.