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EMI, Sony BMG offer free music on China Web sites

"Fee-based music services haven't really caught on in China, but there are other ways to make money from the demand for music."

Charles Chao, Sina Corp's chief executive officer

EMI Group Plc, Sony BMG and the world's biggest record companies are offering free music by Beyonce Knowles and John Lennon on the Internet in China to tap advertisers in a market where 80 percent of songs are pirated.

Sina Corp (新浪), China's biggest Web portal, will split sales from advertising with the record companies, which include Warner Music Group Corp, Universal Music Group and Taiwan's Rock Records (滾石唱片), CEO Charles Chao (趙廣民) said yesterday in a telephone interview from Beijing.

The service provides streaming music, which can't be downloaded to personal computers, he said.

Record companies are offering free music to bypass piracy in the world's second-biggest Internet market by users. The agreement with Shanghai-based Sina will help the music companies win a share of the Chinese online ad market, which may double sales in the two years to next year to 11.8 billion yuan (US$1.5 billion), the Internet Society of China said.

"We see a lot of potential in music," Chao said. "Fee-based music services haven't really caught on in China, but there are other ways to make money from the demand for music."

The tie-up involves an unspecified profit-sharing scheme from advertising, download fees and revenue from wireless value-added services. But Chao declined to give financial details of the agreement.

Users can download the music to their mobile phones. Songs typically sell for less than 10 yuan each, said Fu Chen, a Shanghai-based Sina spokeswoman.

Statistics showed that by the end of last year China's number of mobile phone users exceeded 460 million, while Internet subscribers reached around 130 million.

Sales of pirated music in China totaled US$410 million in 2005, according to the International Federation of the Phonographic Industry, a music industry group whose members include Sony BMG, EMI, Warner, and Universal.

London-based EMI signed an agreement in January to provide free streaming copies of its Chinese-language music on the Web site of Baidu.com Inc (百度), the operator of China's most-used search Web site.

The research firm iSuppli forecast earlier last year that the global digital music market by 2010 is likely to hit nearly US$14.9 billion, a six-fold increase from in 2005, and see its share in the whole music industry rise from 12 percent last year to 40 percent, iSuppli said.
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