Baidu Music, with 150M monthly active users, beefs up its offering as Apple invades

It’s possible that Apple Music’s launch in China at the end of September has put local rival Baidu Music on the defensive. Today, Baidu is announcing plans to merge its music-streaming service with Taihe Entertainment Group, one of China’s leading music service providers.

The deal is expected to bring Taihe’s “extensive intellectual property… [and] artists and repertoire (A&R) resources” to Baidu Music’s “powerful downstream digital platform and distribution capabilities,” according to a release.

Specifically, Taihe holds the rights to more than 700,000 recordings, as well as “long-term cooperation agreements with hundreds of international and domestic music institutions.”

Baidu, meanwhile, now boasts 150 million monthly active users — though it’s not clear how many of those are paying customers.

Baidu Music costs around $1-2 per month (depending on RMB currency fluctuations with the USD), putting it head-to-head with Apple Music in the country (Apple’s offering is available at a similar price point in the China market).

But it’s unlikely that Baidu sees more than a negligible percentage of paying subscribers. Most will be using the service’s basic free offering, in the same way that Spotify users can enjoy a limited service for free.

While Baidu is undoubtedly a household name for Chinese consumers, it’s unlikely that Baidu’s music-streaming service commands the same premium brand image that Apple enjoys — meaning Baidu may find it tougher to persuade users to pay.

Users who can afford to pay will likely seriously consider Apple Music, instead.

“As the intellectual property regime continues to improve in China and users are increasingly willing to pay for online content, prospects for the Chinese digital music industry look increasingly bright,” Baidu said.

The company cited research by Analysys Intl. that expects China’s digital music market to reach about $2.15 billion this year, a 30 percent jump from 2014. That could grow to about $2.8 billion by 2017.