As BusinessWeek reports, China has a HUGE music pirating problem. They reference a man by the name of Eric Zhou, who lives in Beijing and likes listening to western pop music. He doesn’t pay for the music though, which he receives thanks to Chinese search engine Baidu (BIDU). Baidu has a special MP3 tab that allows users to quickly find and download MP3s. Eric listens to everything from “the Backstreet Boys to the Spice Girls, on his MP3 player” (which should be a crime in itself). He does not think that he is doing any wrong by downloading these songs and believes that the fault lies with the law and not the users. And Eric is not alone, according to Leong May See, Asia director for the International Federation of the Phonographic Industry, nearly 100% of all music downloaded in China is pirated. WOW! So how can Google China gain search market share if it does not allow access to pirated music, while its rival nearly promotes it? It can’t.
BusinessWeek says that the ease at which Baidu’s users can find MP3s has made it hard for Google China to compete with Baidu. Google indeed has a challenge, but what about companies that sell music for that stuff called money? It would be nearly impossible for them to thrive with the current piracy levels in China. But according to Jianguang Li, a Chinese venture capitalist, “more Chinese are learning to respect intellectual property online.” Li has even participated in funding companies who charge for downloading music. But with those estimated piracy rates in China nearing 100%, I doubt that any of those companies will create the next iTunes.