The music streaming market in Russia will grow by 10–15% by the end of 2024

The volume of the music streaming market in Russia, which reached 24–26 billion rubles at the end of 2023, will grow by another 10–15% in 2024. In general, industry participants’ income increases due to multi-subscriptions, as well as an increase in the total number of paying users. Streaming companies expect that one of the revenue drivers this year will be the spread of smart speakers. Its participants call “political events” the main risk for the market, noting that the influence of politics on foreign content providers is still great.

The music streaming market in Russia will grow by 10–15% by the end of 2024, its participants interviewed by Kommersant expect. Thus, Yandex Music predicts growth of the segment at the end of 2024 at 15%, editor-in-chief of the Intermedia agency Evgeny Safronov also speaks of 10–15%. “Sound” does not provide exact estimates, but believes that “it will be double digits.”

In 2023, Yandex Music notes, the total income of subscription music streaming in the Russian Federation amounted to 24–26 billion rubles. The service itself last year increased revenue by 63.7%, to 27.1 billion rubles, net profit amounted to 3.7 billion rubles, according to data from the state information resource for accounting (financial) statements. In 2022, the platform’s revenue was at the level of 16.6 billion rubles. with a net loss of 3.9 billion rubles. However, a representative of the service clarified that the legal entity “Yandex Music” takes into account “a significant part of the income” of “Yandex Poster” and other services as part of “Yandex Plus”: “This is due to the corporate structure of the company.”

The head of Yandex Music, Alexandra Sagalovich, clarified that the market is growing primarily due to subscriptions and the number of people willing to pay for them: “More and more often, these are multi-subscriptions, when you get access not to one service, but to several.” She cites GfK data, according to which in two years the number of music subscription users has grown by 20%, exceeding 23 million people.

Revenue from Sound (included in the SberPrime subscription) for 2023 increased by 26%, to 4.7 billion rubles, with a net loss of 1.4 billion rubles. According to the general producer of the company, Sergei Baldin, “Zvuk” is among the top 3 audio streaming markets in the Russian Federation. He confirmed Alexandra Sagalovich’s version about the development of the market through multi-subscriptions, but also pointed out the importance of introducing artificial intelligence into streaming and working with the promotion of tracks on social networks: “Songs that achieve success in social networks become very noticeable in streaming. A striking example is Katya Lel with the track “My Marmalade.” The latter, a Kommersant source on the media market points out, has again become popular not only in the Russian Federation, but also abroad thanks to TikTok.

MTS Music (part of MTS) does not have a separate legal entity; the content and service provider is Yandex Music LLC (formerly Yandex Media Services LLC), the application’s user agreement states. The company did not provide data on the financial results of the service. At the same time, last year the number of daily active users of the application increased by 53%, says the head of MTS Music, Maxim Petrovsky. The VK Music service is part of the VK ecosystem and does not have a separate legal entity. A representative of the holding declined to comment.

The Russian music streaming market showed a decline for the first time in 2022: due to the outbreak of hostilities in Ukraine, many major labels – Universal Music Group, Sony Music and Warner Music Group – suspended operations in Russia. Because of this, Russian streaming services have lost a significant part of foreign music (see “Kommersant” dated March 14, 2022). But already in 2023, the seized catalogs of foreign artists appeared in “Sound” (see “Kommersant” dated May 3, 2023), they can be found in the music section of “VKontakte”, “Yandex Music”. All services insist that the tracks are posted by users thanks to UGC (the ability to upload works through your personal account).

Nowadays, listening to music among subscribers with smart speakers is noticeably growing, adds Alexandra Sagalovich: “We expect that the smart speaker market in 2024 will grow by about 20% and amount to about 5.5 million new devices.” In her opinion, an important point of growth will also be the “emergence of local content and new artists.” Now the market is relatively stabilized, says a top manager of one of the distribution services: “But certain political events in the information field can undermine this stability, as happened in 2022. For example, foreign partners will refuse to work with us even through third-party structures in the CIS.”

Yulia Yurasova