Since its launch in Sweden in 2008, Spotify has asserted itself as one of the most popular music streaming service of its kind globally. The company serves more than 25 million users and paid subscribers in almost 30 markets, from Western and Eastern Europe to the USA, Mexico, Hong Kong, Malaysia, and Singapore.
Spotify is not yet available to Russian users, but at the end of January, the company registered a subsidiary in Russia under the Director-General Igor Sorokin. The Moscow representatives are currently based in a Moscow business center, just next to the offices of eBay and PayPal.
Representatives of the Swedish company’s head office reported to Izvestia that their goal was “to make Spotify accessible everywhere”, but they declined to comment about their plans for launching Spotify in Russia.
Spotify will face strong competition from iTunes, which has become the driver of Russia’s digital music market following its launch in December 2012. Google Music Play launched in October 2013.
Another Western player, Deezer, entered the Russian market even earlier, in late 2011, but without strong traction so far.
Two local players, Yandex.Music and Megafon’s Trava.ru, occupy up to one half of the market, with combined sales estimated at nearly 900 million rubles ($27 million) last year, according to a study by AC&M Consulting.
“There used to be the idea that Russian users weren’t prepared to pay for music downloads, but with the appearance of iTunes in Russia, this myth has been dispelled,” said Dmitri Konov, the head of Universal Music Russia, to Izvestia. “We feel that iTunes has had a positive effect. The more players of this type in the market, then the closer our market will be to the international one. It is excellent that Spotify has arrived. It will force Russian services, like “Yandex.Music”, to think about counter-steps.”
Alexander Blinov, the director of “Gala Records/EMI” in Russia is confident that iTunes and Spotify will not be in competition as “they have different uses: Apple provides the possibility to download music to a mobile device, whereas Spotify only provides a means of listening. The Internet is developing in Russia while the protection of intellectual property allows legal services to take up a larger share in the market.”
Myz.ru CEO Sergei Sichar does not believe that anything will change after Spotify launches in Russia. “Until such services such as VKontakte and Odnoklassniki deal with the issue of illegal content, the situation will not change,” Sichar said.
This story is based partly on an article published by Izvestia and translated by Rusbase.
