MTS started the record – Newspaper Kommersant No. 1 (7446) dated 01/09/2023

MTS, whose structures are already engaged in promotional, concert and ticketing activities, will launch its own music label. Foreign Warner Music, Universal Music and Sony Music stopped entering into new contracts in Russia after the outbreak of hostilities in Ukraine, and new players, such as VK, have already appeared in the segment. Experts note that in order to attract artists, they need to provide demanded services and reasonable advance payments.

MTS will launch its own music label in the spring, Kommersant was told in the company. The new line of business will include distribution of tracks to all music streaming platforms, marketing support, promo and PR, concert and ticketing activities, and other services. Also, the artists of the MTS label will be able to “fill the concert venues under the control of MTS Live with content.” The direction was headed by Nadezhda Boychevsky, ex-general director of the Russian division of the American distributor ONErpm Eastern. She was also the executive producer of the Respect Production label (Casta, Max Korzh, etc.) and worked at Universal Music Russia. Investments in the project at MTS are not disclosed.

MTS will offer artists and their managers work on two models – Premium (full support in rights management and monetization, as well as marketing, advances, working with catalogs and creating new works) and DIY (do it yourself – a format in which an artist or his the manager is engaged in promotion mainly independently). As part of the DIY, the artist will be able to use MTS as an aggregator for uploading tracks to streaming for subsequent monetization.

The company clarified that the download will take place through partners providing software, their names are not disclosed. Now the largest participant in the digital music distribution market in the Russian Federation is the Zvonko Group (which unites Pervoye Muzykalnoe, the National Music Publishing House, the Soyuz studio, Soyuz Music), the French Believe Digital, ONErpm and a number of small companies continue to work. In September, VK Records, which will create its own music labels, launched VK. The holding also plans to distribute content. To download music to foreign streaming sites, including Apple Music and Spotify, VK, according to Kommersant, is considering purchasing Multiza, which has offices abroad (see Kommersant dated December 20, 2022).

MTS has been present on the music market for several years, including developing the MTS Music streaming service based on Yandex Music technologies, and MTS Live, which is engaged in promotional, concert, ticketing activities, and invests in creating a network of concert venues (see “Kommersant” September 23, 2022). In such a situation, creating your own label is a logical step, says Sergei Babich, director of the Colisium International Music Industry Forum: “Thanks to international relations and the presence of offices abroad, MTS will be able to provide artists with more opportunities for monetization.”

After Apple Music, Spotify, YouTube Music left Russia, it became difficult to conclude direct contracts with these sites and make payments to artists, Mr. Babich notes. In his opinion, entering the VK and MTS segment contributes to increased competition after the shutdown of foreign major labels. Warner Music, Universal Music and Sony Music stopped making new contracts with artists in Russia after the start of the military operation in Ukraine (see Kommersant dated March 15, 2022).

But the music market is quite conservative, personal connections play a big role, notes Kommersant’s interlocutor in the music streaming segment: “Therefore, MTS will have to earn a reputation and trust from the audience, but given the fact that the segment is being heavily redistributed, new artists appear who were not very strong before. engaged in promotion, the company will be able to take a significant share, subject to the offer of in-demand services and a reasonable advance.”

Julia Silence