BEIJING -- China's first association of Internet music operators and Internet music content providers, the Internet Music Industry Development Consortium, has been formed in Beijing, according to a statement issued by Ministry of Culture on Thursday.

Some 20 firms signed a protocol for promoting healthy development of the country's Internet music industry and became first members of the association at a Wednesday conference that marked its founding, said the statement posted on the ministry's official website.

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The protocol also called for lawful production of music content, an increase of indigenous music products and offered guidance on intra-industry competition and dispute settlement.

Among the signatories are Internet giants Tencent, Sina, Baidu, record labels China Record Corporation, Ocean Butterflies Music Co Ltd and mobile telecom services China Mobile, China Telecom, and China Unicom.

Addressing the conference, Li Xiong, director of the cultural market department under the ministry, said China's Internet music market had seen steady development in recent years but faced critical challenges, such as piracy.

China boasted some 351 firms in fields of Internet music, and the country's Internet music market value amounted to 2.3 billion yuan (around $355 million) as of end of 2010, up 14.4 percent year-on-year, according to Li.