Eleven music companies jointly filed a lawsuit against Yahoo!
China, owned by Chinese e-commerce giant Alibaba, over its alleged
involvement in the illegal downloading and playing of copyrighted
music.
Led by industry group the International Federation of the
Phonographic Industry (IFPI), the corporations, including EMI, Sony
BMG Music Entertainment, Warner Music, and Universal Music, are
suing Yahoo! China for an estimated 5.5 million yuan in
damages.
"We expect to eventually win," John Kennedy, IFPI chairman, told
Financial Times on Tuesday. "We believe they are involved in
infringing upon our members' rights on a major scale."
A spokesman for Alibaba told China Daily yesterday that
Yahoo! China only provides Web links in its music search results
and should not be held responsible for contents of third-party
websites.
In November, another Chinese search engine, Baidu.com, won a
similar lawsuit launched by IFPI. But IFPI has said it is confident
the case against Yahoo! China is strong and that it's unwilling to
wait until the result of its appeal against the Baidu ruling before
proceeding with this new lawsuit.
"I think the Baidu ruling will act as a negative precedent if
IFPI fails to raise stronger evidence in its new lawsuit," said Yu
Guofu, chief lawyer of Sam Partners Law Firm, who explained that
such cases are still controversial in China.
Liu Bin, an analyst from BDA China, estimated that conflicts
between traditional record companies and Internet companies will
continue in China over the next few years, resulting in similar
lawsuits.
"Digital music contributes 20 to 30 percent of the total revenue
for Warner Music, Universal Music, Sony BMG Music, and EMI in China
every year, much higher than their world average of 10 percent,"
said Liu. "And for some Chinese record companies, digital music
accounted for around 50 percent of the total revenue."
The popularity of digital music in China, said Liu, comes from
the country's sluggish record sales, which is greatly affected by
the prevalence of pirated CDs and a robust demand for mobile music
such as ring tones and multimedia messaging services.
Liu said a chunk of international record giants' digital revenue
in China comes from mobile music and only 10 to 20 percent is from
online music, a market believed to have been dented by thousands of
music websites providing free music downloading services and search
engines like Baidu and Yahoo! China, which compile download links
on their sites.
"But I don't think record companies will get what they want if
they continue to regard Internet companies as their No 1 revenue
killer," Liu said. "I think there will be more cooperation than
conflict in the future."
Signs of cooperation are, in fact, already evident. In January,
EMI and Baidu came to an agreement, in which EMI would authorize
Baidu to stream its Chinese repertoire on Baidu's music search
channel. The two also declared they would look into the possibility
of offering free music downloads.
(China Daily March 8, 2007)