“After all, the language environment determines the audience”

How Russian streaming services attract an audience of foreign platforms that have left the market amid military operations in Ukraine, and also cope with the problems of disabling payments in Apple Pay and Google Pay, Kommersant was told by the director of the music ecosystem and video content department of VK Nikolay Duksin.

– In the spring, the world’s largest labels Universal Music Group, Sony Music and Warner Music Group suspended their work in Russia. The situation has not changed?

– At the moment, they do not provide part of the new releases for Russian streaming services. This is a well known fact. The main part of the library is available.

Do artists themselves revoke catalogs?

– There are artists who have publicly stated that they do not want to be represented in a particular territory. It happened before. I wouldn’t say it’s massive. To say that foreign catalogs are not available is incorrect. Most of them are presented in the service.

– At the Russian Creative Week, there was a figure that more than 80% of the music that is consumed in the Russian Federation is domestic. Do you agree with this assessment?

— This is a unique feature of our market. In fairness, there are not very many such markets. We have a high share of local content in music consumption, you can name different numbers and you can argue about them, it all depends on the showcase we are talking about. In fact, we have a strong musical level, our artists get into the world charts, including the annual ones, they really listen very well outside of Russia. The frequency of releases is very high, their quality is also high, so the share of the local catalog is decisive, it’s true.

— Can Russian artists now post their tracks on foreign streaming platforms?

— Yes, this possibility remains, including through digital distributors.

— Do our artists have prospects in the streaming markets of Asia, India, Africa? Can you think of examples that allowed sharing audiences?

— The markets of Asia, Africa, India, Saudi Arabia and Pakistan operate according to the same territorial standards as the Russian one. They also have a determining share of the local directory. To say that these countries may turn out to be a kind of potential market for artists is probably not entirely correct, because after all, the language environment determines the audience. But there are examples of Russian electronic musicians who, precisely because there is no language component, are becoming popular outside the country. Particularly in Asia, where dance music is highly developed.

– If now VK Music is being delivered the content of an artist who looks controversial from the point of view of his political position, will you make the releases available? Do you have restrictions, for example, for artists recognized as foreign agents?

— We are within the legal field. The copyright holder can remove the work or not publish it. Otherwise, the work must be subject to an appropriate legal or regulatory decision. (In July, for example, the American distributor ONErpm began to withdraw from Russian streaming sites, including Yandex.Music, Sound and VK Music, releases by musicians whose accounts are not registered in Russia, Belarus and Kazakhstan.— “b”).

— How do you assess the competition in the market? New services appear, for example, GPM launched the Audio Club. Is there a place for them?

Time will tell if there is room. But the emergence of new players means new ideas, new people, new techniques that will certainly not hurt the market. Then the user will determine what is more profitable and more convenient for him.

— How did the departure of Deezer and Spotify from Russia affect your subscriber base?

“There was an immediate increase. And still people continue to cross. Using foreign services has become much more difficult. Deezer had practically no share in Russia, it is still a service that is focused more on England, Germany, France. Spotify has certainly been a notable player. Part of his audience has left, and we, of course, try to work with it.

– Disabling the possibility of payment in Apple Pay and Google Pay in the spring affected the number of subscribers?

— We have available including the consumption of music without a subscription. Of course, the story of disabling payments is significant. But, for example, the Apple system retains the ability to pay from the account of a mobile operator. Some users even got additional SIM cards for this. There are difficulties with paying through Google, in this regard, there was a certain outflow from all market players. I would not like to name specific figures. We offer alternative options for renewing or connecting a subscription, when you can simply link a card in our payment service.

— How do you assess the growth prospects of the music streaming market in Russia and the CIS?

– In accordance with open data from analysts, at the end of 2021, the Russian streaming market was estimated at about 21 billion rubles. Estimating the number of subscribers is more difficult, this is the closed data of each service. I can say that tens of millions of people listen to music every day. VKontakte has over 100 million monthly users, and most of them listen to music all the time.

In general, there are two directions of development. Firstly, due to the lower threshold of the audience, involving as young listeners as possible. Secondly, it is the involvement of an audience of 35+, listeners who are interested not only in music, but also in other audio content. Now we can say with confidence that many people are used to consuming music legally. Users do not want to return to the gray zone. The audience will grow precisely due to the expansion of the age range, and the dynamics largely depend on how we take into account the tastes of people and their needs.

Interviewed by Julia Tishina