Enlarged musical form – Newspaper Kommersant No. 7 (7452) dated 01/17/2023

The structures of the former top managers of Warner Music Russia bought the Kiss Koala label, which manages the local catalog of Sony Music that left Russia. As a result of the merger, a new distributor appeared on the market, which will compete with Zvonko Group and Believe. The presence of another major player in the segment will help artists increase their income, experts expect.

Kiss Koala LLC (formerly Sony Music Entertainment LLC, the Russian division of Sony Music Group), which took over the management of the Russian catalog of Sony Music, which left the country, changed owners, found “Kommersant” in the SPARK-Interfax database. Since December 29, it has been owned by Merit LLC, registered on December 9, which is 80% owned by Alexander Aksenov and 20% by Lilia Belyaeva.

Previously, Sony Music Entertainment LLC controlled SBME Holdings BV, a subsidiary of Sony Group Corporation. In September, the company was renamed Kiss Koala LLC, it came under the control of the top managers of the Russian division of the group, Arina Dmitrieva (70%) and Dmitry Kozik (30%; see Kommersant dated September 8, 2022). Ms. Dmitrieva did not answer “Kommersant”, it was not possible to contact Messrs. Kozik and Aksenov, as well as Lilia Belyaeva.

The new owners of Kiss Koala are associated with the music distributor S&P Digital, whose team has managed Warner Music Russia in recent months (among the artists signed by the label were Artik & Asti, Feduk, Ani Lorak, Yegor Creed, etc.), two interlocutors of Kommersant say on the musical market. The authors of the profile Telegram channel “Intro / Outro” also write about this. Warner Music Group on March 10 announced the suspension of activities in the country, but its Russian structures continued to work (see Kommersant dated September 20, 2022).

Sony Music has withdrawn its foreign catalogs from Russian streaming services (Elvis Presley, Michael Jackson, Beyonce, etc.). But Kiss Koala received a Russian catalog under management: among the artists signed by the label were rapper Kizaru, Denis Matsuev, Sergey Lazarev, Slava KPSS, and others. The share of Sony Music in music distribution in Russia was estimated at 15-20%.

The deal to buy Kiss Koala means that the Russian catalogs of Sony Music and Warner Music will be managed by one team, a Kommersant source says: “In essence, this is a merger of majors, teams and catalogs are identical. This could not happen in the global market, but suddenly it happened in the Russian Federation.”

According to the National Federation of the Music Industry (NFMI), the share of Kiss Koala in the Russian music market could reach 5-10%, its CEO Nikita Danilov believes: “With Sony leaving the market, the deal with Kiss Koala will with Russian catalog. A “powerful new player” appears, which will receive 30–40% of the music content market in the Russian Federation “taking into account already signed and new contracts” and will be able to claim second or third place after Zvonko Group (combines First Music Publishing House, National Music Publishing House ”, Studio Soyuz, etc.) and the French Believe, another interlocutor of Kommersant believes. The value of the deal to sell Kiss Koala, he said, depends on which artists are left and how long they are signed.

According to Kommersant’s interlocutor, the growth of a new market participant will be limited by problems with the distribution of songs by Russian artists to foreign platforms: “Apple Music, Spotify and others still account for about 30% of the income of Russian artists, including income from listening to the Russian-speaking audience from abroad”. A new player does not have the opportunity to supply content abroad without intermediaries, and they can take up to 60% of the artist’s income. At the same time, the source of Kommersant believes that consolidation will be good news for big artists: “The battle of advances will begin again – when three or four labels offer money.”

Valeria Lebedeva, Yulia Tishina