Following on the heels of print publishers, China's music publishers have begun taking action against Chinese internet company Baidu (Nasdaq: BIDU) for alleged copyright infringement. On March 15, the China Audio and Video Association's (CAVA) China Recording Industry Committee published an open letter protesting Baidu's provision of links to pirated music. A week later, the committee published a "Letter to Our Friends in the Music Industry," in which it said that it had received responses to its open letter from more than 100 musicians. The letter called on people in the music industry to amass evidence of online music piracy for future administrative and civil lawsuits.
Xu Xiaofeng, former president of Warner Music China, said that websites offering pirated music were generally concealed such that without links from Baidu, 80% of them would have to shut down for lack of traffic.
A source in the music industry who asked to remain anonymous said that small- to mid-sized music websites relied on pirated music to gain the traffic necessary to sell ads; upon receiving money from advertisers, the sites purchase premium results ranking on Baidu - the higher their ranking, the greater their advertising revenues. In essence, the source said, the music industry has given birth to an "unhealthy" industry chain.
Baidu has not yet contacted CAVA.