Big music labels will try to slay the Chinese dragon of song piracy by forcing major Chinese search sites Baidu and Sohu to cut their links to pirated songs.

Good luck with that. When people want music, as the Wall Street Journal pointed out in its report, they will find ways to get it even if the two search sites Americanize themselves to satisfy the labels.

The Beijing First Intermediate People’s Court faces the task of deciding the case. If they opt to penalize Baidu $9 million in damages, and Sohu $7.5 million, they could be sending a message that linking to content they do not host assigns liability to the search engines.

Both Baidu and Sohu deny any responsibility for what other sites host. As search engines, they only provide a list of links.

The lawsuit poses greater implications beyond the song-listening habits in China. Armed with a decision in favor of the plaintiffs, other litigation-minded types around the world might decide the time is right to bring back the "deep-linking" lawsuits of yesteryear.

You have to go all the way back to 1997, as the Web started to takeoff into mainstream usage, to find the Ticketmaster versus Microsoft Sidewalk lawsuit over linking. Ticketmaster did not want Sidewalk linking directly to individual event pages, but to the home page of Ticketmaster instead.

As Salon recounted, Ticketmaster had a deal in place with CitySearch at the time to permit it to "deep link" to ticket pages. Eventually everything reached a settlement.

Everything but the concept of deep linking.

Without hyperlinks, there is no Web. The news industry used to complain about deep links to their stories, around the time Ticketmaster made its rumblings at Sidewalk.

But if there is a law against deep linking, we have yet to see it. Despite that, American sites routinely yield to lawyers who complain about links to content the sites themselves do not host.

The issue needs a decision, for more than just the idea of deep linking. It comes back to fair use, a nebulous concept that resists attempts to define, yet seems to become more restrictive year after year. JD Lasica wrote Darknet to address the continued erosion of fair use by deep-pocketed music, movie, and publishing interests.

Though it has been claimed fair use needs to be loosely defined to work best, as to not push any particular content into a model that doesn’t really suit it, fair use and its advocates need to grow up and figure out a way to function in the 21st Century.

Otherwise, a Chinese court may make that decision for everyone. It may not be the best decision for a Web that grew on its strength of links. If the bullying music industry makes its mark in China with this case, make no mistake, others can and will try to use it to their advantage.

A world of commentary controlled entirely by corporate interests, even more so than today, can’t be what’s best. It’s not all about links. It’s about control.

.  BusinessWeek recently suggested that SonyBMG would drop DRM for select experiments, but Hypebot broke the story of the label group going totally DRM free last Friday.

This makes Amazon MP3 the only retailer to offer DRM free tracks from every major record label as well as 33,000 indie labels. Sources tell Hypebot that other download stores will begin selling DRM free product from all four majors before the end of the first quarter of the year.

As with all tracks in the broad Amazon mp3 catalog, Sony BMG’s DRM free offering is playable on any device using any software and to burn songs to CDs.

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When we heard from Sony BMG’s rep about the DRM free plan, we asked if an online option would be forthcoming. What we got back from them was indistinguishable from John Cage’s 4’33".

Now we know why. News has begun to trickle out from Amazon about a deal with Sony BMG to sell digital music by its artists later this month.

Amazon said its agreement with Sony BMG makes it the first music retailer to offer DRM free songs from the four major labels: Warner, Universal, EMI, and Sony.

This situation also makes Amazon a player with the whole gamut of MP3 player manufacturers. Apple’s iPods and Microsoft’s Zunes both accept MP3s, as do a host of other devices.

Amazon is trying to play nicely with Apple and Microsoft, with an MP3 downloader application that automatically adds purchased music to either iTunes or Windows Media Player as desired. That makes sense, as Amazon sells both the Zune and the iPod in its electronics store.

Now that the music will be out there, easy to purchase legally, as an MP3 format song, the music labels hope people will choose that option rather than the peer to peer trading the labels detest.

There will always be people who opt for a price of free for music, no matter what pricing exists. But if some of the people who trade music choose to buy it instead, the labels gain a piece of a sale that they wouldn’t have at all in years past.

A broad "experiment" is in the final planning stages, but details of some of Sony BMG’s efforts are already emerging. Justin Timberlake, who records for Sony’s Jive and other artists from the merged label group will be participating in a Super Bowl promotion with Pepsi on Feb. 3 as part of a free distribution of 1 billion songs through Amazon’s popular DRM-free download service.

Sony has already been experimenting with DRM-free song giveaways for developing artists for the last six months. "A lot of these tests have led people to believe that maybe this works," said a Sony BMG executive who asked not to be identified.

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Travel and a specific camcorder compared to the ability to upload some extremely popular entertainment clips?  Well, maybe.  In any event, users have indeed gained that ability to upload, and onlookers have taken note.

With artists like Johnny Cash, Bruce Springsteen, and System of a Down (among dozens, if not hundreds, of others) involved, the arrangement seems highly significant.  There’s one nagging question, though, since Yahoo Video is pretty much shunned by all; Stan Schroeder notes, “This is the first time Yahoo has signed a deal with a major record company for licensing video content; could it mean that they’re preparing something extra in the video/music arena soon?”

We may just have to wait and see on that front.  Still, for Yahoo’s sake, there hopefully won’t be too much of a delay before we find out – Google signed a similar deal with Sony BMG over a year ago, and YouTube isn’t growing any less popular as the days pass by.

Sony BMG will, by the way, receive a cut of advertising revenue, but neither it nor Yahoo have shared specifics.

MySpace, Sony BMG (Finally) Make Deal

This arrangement probably should have been made four months ago, when Sony Pictures Television joined with MySpace and Honda to create some “minisodes.”  It also would have fit into ongoing events a little more recently, when Sony BMG signed a deal with little old Imeem.

Still, despite whatever foot-dragging took place, it would seem that Sony BMG and MySpace are happy to finally be together, and according to Staci D. Kramer, “[t]he two companies will share sponsorship and ad revenues generated by the music videos and profile pages.”

Music lovers should also be pleased; although many of the deal’s details remain unknown, an official statement mentioned past MySpace events involving a lot of big names, including Tenacious D, Velvet Revolver, and Bruce Springsteen.  We can only hope that this quality will be maintained.

From a more businesslike perspective, it seems that this arrangement, if handled properly, could become an important development in MySpace’s war with Facebook.

Sony follows in the footsteps of the Warner Music Group who signed a deal with Imeem in July after suing the company for copyright violation. EMI is also in talks with Imeem according to the Silicon Alley Insider.

When the start-up launched in June none of the major record labels were interested in making licensing deals with the service but because of declining music sales the labels are more willing to explore new distribution avenues. In exchange for making their content available to Imeem users, Warner and independent labels receive a portion of the ad revenue that the site generates.

Imeem also has licensing agreements with independent labels including, Nettwerk, Beggars Group, Matador Records, XL Recordings and other labels distributed by independent distributor companies IODA, The Orchard and Redeye Distribution.

Registered users of Imeem can post songs or videos on their accounts and share them with others. Users can stream full songs or videos from a recoding artist’s label as long as Imeem has a content deal with the label. If there is no deal in place users can access a 30 second clip of a song or video.

Google Syndicating Video Through AdSense

The Times reported that Google was working with those companies to syndicate their videos on other websites. The videos are sponsored and Google splits the ad revenue with both the website that runs the video, and the producers of it.

We’ll use Adversus.com as an example because it’s a lot more fun than the StreetInsider.com running Pantene sponsored Wall Street Journal videos – aren’t those publications rivals though? If you look to the bottom of this Adversus model page (see, I said it was a lot more fun), you’ll see a video box "powered by Google."

In that box, is a short tutorial, one of 22 tutorials it appears, from Epicurious.com about how to use knives. Above the box is a text link to Epicurious.com. In this example, it seems Epicurious.com is both the advertiser as well as the content producer. It’s not clear though, what knives have to do with advertising models – but who really cares?

What matters is that this is next step to TV-ifying, for lack of a better word, the Internet. The NYT article alludes that this is a real compromise from video content producers, who traditionally have absorbed all ad revenue generated by their content. Though the producers would rather have all that audience to themselves, they realize that traffic to there site largely depends on Google.

Kim Malone, director of online sales for Google AdSense, said the new program offered producers and advertisers "literally millions of channels on the Internet." Economy of scale, then, where millions of funnels collect pennies from heaven, is enough to change the tradition of video advertising.

For anyone doubting Google moves in the past year, like buying YouTube, the new model serves as an expansion of an already blisteringly successful model.

"So what if Google/YouTube can’t come to agreement on distributing media companies’ content onto YouTube," writes Rafat Ali, "the other way around (the core of its business) is working just fine, thank you."

One of the earliest sightings of the change comes from the Google Operating System blog, where the author has a few questions about the new ad model:

* What are the videos sites? How to detect all of them and find the embeddable code?

* Will those sites want the Plus Box? Maybe they’ll say Google steals traffic from them, because they want to show ads and to have big page views.

* Who will click on the search result to see the video (and maybe some comments and context), like they used to do?

* It will be the first time when content outside of Google control will be included in the search results (for example, the thumbnails from image search results are hosted by Google). Will there be performance issues?

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Only a few months removed from the PR nightmare Sony BMG created for itself with the placement of rootkit software on music CDs as part of a DRM package, the music label again finds itself the target of lawsuits.

This time, it is a pair of older bands that have taken issue with Sony BMG. Since both Cheap Trick and the Allman Brothers signed contracts many years ahead of the invention of the World Wide Web, let alone digital music, those bands lose royalties to the label due to calculations of the cost of packaging, the Wall Street Journal reported.

The Allman Brothers claim they are being paid only a seventh of what they should receive, since modern bands with newer contracts account for digital downloads in their negotiations. An attorney for the bands, Brian Caplan, noted in the article that Sony BMG reduces royalty payments based on factors like packaging costs and breakage during shipping.

Neither of those physical factors apply to the digital realm, however. Taking iTunes sales as an example, the Allmans make $45.05 on each 1,000 songs sold under the current contract. That comes to over $24,000 when taking Nielsen SoundScan data of 538,000 Allmans songs sold as downloads since mid-2002.

A major label like Sony BMG likely receives 80 cents of every 99 cent download. Out of that 80 cents, 4.5 cents goes to the Allmans based on their existing terms.

Until recently, the music labels have been fighting publicly with Apple CEO Steve Jobs to offer variable pricing for songs instead of keeping the existing single price model. It’s pretty obvious why.

If the band’s work was treated as a license for each download, the calculation increases to $315.50 for those 1,000 songs, or almost $170,000. This compensation would be at a much higher rate than what bands receive under current digital royalty terms according to the report.

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David Utter is a staff writer for WebProNews covering technology and business.