"Because the online music service brings high costs with relatively low returns under current business conditions in China, it is reasonable for Yahoo China to give up this product when its overall business performance is declining," You Tianyu, an industry analyst with iResearch, told the Global Times Sunday.
Compared with some developed countries including the US, China's online music services are less developed because pirated music is rampant and only a few users are willing to pay for online music, Jian Wei, director of the working committee on music albums at the China Audio & Video Association, told the Global Times Sunday.
After over a decade of development, there are still no official guidelines on cooperation between music service websites and music copyright owners. But Jian said "a guideline on profit sharing between websites and copyright owners will be released by the association in the first half of 2013."
Among the popular online music service providers, QQ Music owned by Tencent Holdings performs best in the business of paid music, "even though it is still difficult for the firm to balance income with expenditure when it comes to music service," You said.
You also noted that the future development prospects of Yahoo China are uncertain until its holding company Alibaba Group confirms when or whether it will finish its initial public offering (IPO).
Market rumors that Alibaba Group might seek a listing surfaced after its CEO Jack Ma Yun wrote in an e-mail sent to employees Tuesday that he will step down as CEO in May.
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