With holiday sales being extremely disappointing and the resultant firing of two of their top music executives, EMI Music is looking to China to prop up its faltering sales. The company made a short-term response of cutting costs and issuing a profit warning.
The company has been slow to respond to the increasing popularity of music being downloaded or streamed on the Internet, with only 9.4 percent of their total music revenue being online. Their competitors have an average of 11 percent in digital revenue of total sales.
Now they're going at it in a big way as they announced that it is launching an ad-supported online music service in China with Internet search giant Baidu Inc.
In the beginning of the partnership they will offer free online streaming without downloads and only music in the Chinese language would be offered at first. From there they will work on developing the ad-supported model.
At this time China has the second-largest amount of Internet users in the world, 
with the U.S. being first. It has a lot of potential for the beleaguered music industry to grow in.
There was no disclosure of the financial terms of the deal.
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