It has double Spotify’s monthly active users – now Baidu’s merged with a record label

Baidu Music, the world’s largest Chinese-language music search platform, has revealed that it now has a whopping 150 million active monthly users – double the last active user count, 75m, confirmed by Spotify.

But that’s not the biggest news to come out of the East Asian giant today: it’s also announced a significant merger with Taihe Entertainment Group, a leading Chinese independent record label which holds the rights to over 700,000 recordings. (To put that into context, that’s roughly the same amount of masters as the ‘new’ BMG.)

Taihe Entertainment Group owns two leading pop music labels in China: Ocean Butterflies and Taihe Rye Music.

The latter label was originally formed in 1996 as a subsidiary of Warner Music Group, but broke away as an independent in 2004. Its roster includes Sophie Chen and the Back Dorm Boys.

As well as its holdings in digital music, Baidu runs China’s biggest search engine – Google China is ranked as No.3 in the market.

The merger with Taihe represents what Baidu’s press release calls ‘the first-ever full integration of a leading Internet platform and a traditional music company’.

Taihe Entertainment Group’s 700,000 recordings are said to hold ‘tremendous commercial value’, while it also holds long-term cooperation agreements with hundreds of international and domestic music institutions.

“As the intellectual property regime continues to improve in China and users are increasingly willing to pay for online content, prospects of the Chinese digital music industry look increasingly bright,” says Baidu’s PR.

The new company promises to combine Taihe’s ‘extensive intellectual property, and its artists and repertoire (A&R) resources’ with Baidu Music’s digital platform and distribution capabilities.

Interestingly, Taihe’s decision to fully merge with Baidu comes after a series of exclusive deals struck by record labels in China.

Sony, Warner and now Believe Digital have inked exclusive distribution deals with Baidu rival Tencent – which owns direct Baidu Music competitor QQ Music.

Meanwhile, BMG has signed an exclusive partnership with online retail giant Alibaba.

The merger of Baidu Music with Taihe is the latest move by Baidu to open up what it calls ‘quality assets to financial and strategic investment’.

This strategy, which has already opened properties like Baidu Takeout Delivery, 91 Desktop, and Zuoyebang to outside investors, aims to promote the independent development of these assets.

China has a population of 1.36bn, but according to the IFPI only contributed $105.2m to global record labels last year – less than ten times the money generated by the UK market.

In other words, China is home to around 1/5th of the world’s population, but generates less than 1% of the annual recorded music business’s revenues.

If the name Baidu seems familiar to music biz types, it’s probably because of a landmark agreement between the majors and the internet group – which runs China’s biggest search engine – in 2011, which also saw a settlement paid following anti-piracy legislation.Music Business Worldwide

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