Internet consumers wary of free offers still flock to the website MicroMu.com and download albums at no cost. In disbelief, they post comments expressing their doubts. "How can these original songs be free and legal?" they asked. It seems as though music fans, who have long dreamed of a free-music world, cannot believe it when it finally arrives.

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And the secret is simple, as the MicroMu label explains it-the idea is to promote local artists to play live, record it, and put it online for consumers to freely take. At the same time, the site has sponsors who pay the company to advertise their brands. Some of the money, in the form of profit sharing that is stipulated in their contracts with the label, goes into the pockets of the artists.

"We want to find a way for both the music companies and artists to survive in the current depressed music industry, without changing the habits of the Internet users who are used to free music downloads," said Shi Lei, Manager of the label.

Make the impossible possible

The Chinese music industry is problematic in many ways, as some business insiders have long worried about-chronic piracy and faltering digital music sales. According to an annual Internet report by iResearch, China's leading online research company, the number of Internet users surpassed 298 million in 2008, and 84.5 percent of them downloaded music from the Internet or listened to it online. A report by Inmusic, one of China's influential music magazines, found that nearly all the free music downloads available on the Internet are illegal. At the same time, the trade in pirated CDs makes up 90 percent of overall CD sales.

"Due to the search engine Baidu.com, there are few independent musicians who can make a living on music sales in the current environment," said Shi. As China's leading search engine, Baidu.com used to take as much as 94.3 percent of the overall market, according to previous iResearch surveys.

However, Shi also noted that consumers' attention and demand for music keeps increasing while music product sales keep declining. "We can use their attention to music to direct them to other consumer products, and thus we find a way to generate profits while providing free music downloads," Shi said. "As far as I know, there's no similar music business modes in foreign countries."

Such a simple idea was brought up by Ed Peto, a Beijing-based British music consultant and promoter, who established the MicroMu label in June 2008. Peto took his idea to the PALM Expo 2008 (17th China International Exhibition on Pro Audio, Light, Music & Technology) and found interested people and his first sponsor. Beyerdynamic, an internationally renowned audio equipment manufacturer whose products are favored by musicians such as Bob Dylan and Joni Mitchell, offered up recording equipment.

The idea interested Dominic Johnson-Hill, founder of Beijing's Plastered T-shirts, who offered financial support for the fledgling website. "We always wanted to get involved in music, so this seemed like the perfect plan," said Johnson-Hill, who has been involved in China's independent music scene.

So far, the label has cooperated with a number of musicians and made 14 releases, the majority being awarded four or five stars by Internet users on various sites. Zhang Weiwei, one of the folk artists the label worked with, created one of the top 10 independent albums of 2008 as chosen by users of Douban.com, one of China's largest online communities of book, movie and music reviews.