VK uploads tracks – Newspaper Kommersant No. 236 (7437) dated 12/20/2022

According to Kommersant, VK may buy the digital music distribution platform Multiza, which has contracts with Western streamers, including Apple Music and Spotify, as well as offices abroad. The holding, Kommersant’s sources say, also negotiated the purchase of the First Music Publishing House, but the parties did not agree on a price. Against the backdrop of the departure of large Western distributors and music rights holders from Russia, experts say that VK has potential in the new segment, but it will depend on the conditions for artists.

Kommersant’s sources in the digital music distribution market said that VK is negotiating the purchase of the Multiza platform (provides digital music distribution and content management services). It is assumed that the company may be merged with VK United Media Agency (UMA), which is engaged in placing tracks in VK Music, VKontakte and Odnoklassniki.

The fact that VK based on UMA wants to distribute content to streaming platforms became known in the summer (see Kommersant on August 23). But UMA can only upload tracks to VK platforms, one of Kommersant’s interlocutors notes: “In order to fully enter the digital distribution and music licensing market, the holding needs a service with ready-made software and contracts with Western streaming.” VK itself, according to him, cannot enter into direct contracts with foreign sites, including due to sanctions against the head of the holding, Vladimir Kiriyenko. VK declined to comment.

The negotiations are at the stage of a technical assessment of the company, the possibility of integrating the Multiza software into the VK infrastructure is being studied, Andrey Volyanik told Kommersant. He specified that Multiza has contracts with Russian and foreign streamers. The company’s website mentions VK Music, Yandex.Music, Sound, Apple Music, Spotify, Shazam, YouTube Music, etc. Multiza has an office in Canada and Dubai, which allows it to make payments from the monetization of music by Russian artists on foreign platforms, Mr. Volyanik added. He did not specify which artists are collaborating with the platform, but noted that it operates with the rights of more than 100,000 Russian-language albums. Sound confirmed that they are collaborating with Multiza. Yandex.Music declined to comment.

VK also negotiated the purchase of PMI’s “First Music Publishing House” (distributing music, licensing it for advertising, films and TV series, promoting artists, producing and organizing concerts, is part of Zvonko Digital, which occupies 25% of the digital content placement market), says one from the interlocutors of “Kommersant”. But, according to him, the parties did not agree on the price. Zvonko Digital did not comment on this information.

It is still difficult to say how profitable it will be for artists to distribute their music through VK, Kommersant’s interlocutors in the market say. “It depends on the VK commission and conditions,” one of them clarifies. But given the fact that many foreign digital distribution services have suspended their work in the Russian Federation (for example, Orchard, Universal Music Group, Sony Music and Warner Music Group), the emergence of a new player looks like a positive event, another Kommersant source notes: “Russian music is quite is in demand on foreign streaming sites, and for Russian artists, placement on foreign services provides additional income.

If we are talking about buying a working business for delivering content to foreign services, it is fair to assume that the issue of receiving payments for it “is resolved in a certain way or there is a clear idea about it,” one of Kommersant’s interlocutors believes. In his opinion, the holding has the potential to take a significant share in the digital distribution market, but only if favorable conditions are provided for artists.

Valeria Lebedeva, Yulia Tishina, Yuri Litvinenko