Google launch download service in China
Why? Because while the service is attractive to the record companies in China, even though ad revenues are likely to be relatively modest, it wouldn't be so attractive elsewhere. The new service launches in the context of a Chinese market where pirated content is the norm and any legit music sale is a plus for content owners. In that context, any attempts to monetise the distribution of downloads online is a welcome development.
And, of course, Google's rivals in China, the Chinese version of Yahoo! and, in particular, Baidu both offer specific MP3 search facilities, which take users directly to all sorts of music sources, most of them illegal (it's been even alleged, by IT website The Register in particular, that Baidu links to illegal sources of music that exist pretty much exclusively for its MP3 search service, and which conveniently move around the web in a bid to avoid detection). Attempts to close those services down through the Chinese courts have not been hugely successful, despite the country's copyright laws now, in theory, being on the record companies' side. While the litigation continues to go through the motions, the Google service can be seen as the record companies trying to beat Yahoo! and Baidu at their own game, but in a way that brings in some revenue.
Announcing the new service yesterday, Lee Kai-Fu, President of Google in China, admitted that the fact his company had previously not provided a music search function had impacted on their ability to compete with their rivals in China. Whether the Chinese public will see the advantage of using a legit music search platform over a non-legit one remains to be seen - I think Google hope their legit service will be easier to use and offer better quality tracks, so that should help - and if the record company's are ever successful in even restricting Yahoo! and Baidu's music search engines through the courts, then Google would presumably suddenly have a real competitive advantage.
Confirming his support for the new service, Lachie Rutherford, President of Warner Music Asia Pacific and also Asia Chairman for the International Federation Of The Phonographic Industry, told reporters: "This is the first serious attempt to start [monetizing] the online market in China. I can't overstate how important this is".
Interestingly, such a service is unlikely to ever launch in the West where a record company's revenue expectations are so much higher and are unlikely, therefore, to be met by Google's advertising revenues (the fact that Google says it can't afford to cover PRS's streaming royalty fees - which are always a lot cheaper than download royalty fees - by ad sales on YouTube is proof of that I think). Which means the new service in China is interesting on a number of levels - including the fact that despite the internet creating a global market place, the way that market place operates can vary greatly from territory to territory.
