China Wants Its MTV

• Email
• Share
• Print

Will MTV rock the world's most populous nation? MTV parent Viacom (NYSE: VIA) is teaming up with Baidu.com (Nasdaq: BIDU) to stream music videos and shows on China's most popular website.

Users will have the option to pay for music videos or stream ad-supported videos for free. You don't need to go out on a limb here to predict that most users will opt for the sponsor-subsidized freebies.

It isn't always that way in China. In the field of online gaming, users have no problem paying for NetEase's (Nasdaq: NTES) Fantasy Westward Journey or The9's (Nasdaq: NCTY) World of Warcraft, as opposed to older ShandaInteractive (Nasdaq: SNDA) titles that are available for free with optional inventory purchases.

The problem here is that Baidu has a reputation -- one it's sorely trying to shake -- as a haven for users seeking out illegal MP3 downloads. According to Alexa.com, 15% of the traffic at China's leading search engine takes place at its mp3.baidu.com subdomain, which specializes in digital download searches. Some of the searches are legit, of course, but Asian record companies have locked horns with Baidu in the past over this. Teaming up with MTV may go a long way to cleaning up that notion, especially with the five major labels in China on board.

What's in it for Viacom? The perfect partner. Baidu isn't just the top draw in China. Only three sites -- Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), and MSN.com -- command larger audiences overall. For those keeping score at home, Baidu is bigger than MySpace or YouTube (which rank sixth and 10th, respectively, on Alexa's traffic list). That type of traffic certainly seems to be ideal for Viacom.

NetEase and Shanda are Motley Fool Rule Breakers newsletter recommendations. Where will the stock newsletter turn to next? Tomorrow's new issue features two brand-new picks, so sign up for your free 30-day trial now.

Longtime Fool contributor Rick Munarriz doesn't know if he still wants his MTV, but he knows that Viacom's shareholders wouldn't mind money for nothing. He does not own shares in any of the companies mentioned in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. Yahoo! is a Stock Advisor pick. The Fool has a disclosure policy.