Already bigger than Spotify, China’s search engine giant doubles down on streaming music

Sigur Rós perform onstage. They’re awesome, by the way. Photo credit: Fuad Hafis.

Spotify claims to be the biggest music service in the world with about 75 million active users and 20 million paying subscribers. But there is one that’s larger – albeit one confined to China. That’s the music portal run by search engine giant Baidu.

Baidu Music now has 150 million monthly active users, the company said yesterday. But there’s no word on how many paying users it has for the “VIP” streaming, which costs a meager RMB 10 (US$1.56) per month. Spotify, which is available in dozens of countries, none of which are China, costs about US$10 per month.

The Baidu Music subscription includes higher quality streaming and downloads, a sound equalizer, and no ads.

Music label merger

Baidu yesterday announced a huge move to bolster its streaming music service, detailing a corporate merger between the Music division and music label Taihe Entertainment Group. The label holds the rights to over 700,000 recordings and has “agreements with hundreds of international and domestic music institutions” and artists, read a joint statement. The financial terms are not disclosed.

It’s “the first-ever full integration of a leading internet platform and a traditional music company,” it added.

As music piracy very slowly subsides, China’s digital music industry looks set for growth, with fully licensed music streaming and downloads – both free and paid – becoming more commonplace. China’s digital music market will reach RMB 13.67 billion (US$2.1 billion) in 2015, growing about 30 percent from 2014. It’s unclear how much of that will be from online ad revenue, as China’s consumers still seem reluctant to pay for online content.

Online music is a new battlefront for China’s web giants, with the likes of Alibaba and Tencent all pushing hard to get both free and paying users to its own streaming music sites. Alibaba owns Xiami (not to be confused with Xiaomi), a music startup it acquired a few years ago.

The music battle increasingly resembles the streaming video war that’s rumbling on between Alibaba, Tencent, Xiaomi, and Baidu. As China’s tech titans push into the nation’s smart TVs, music and music subscriptions look set to be an important part of streaming content packages.