Russian social network vKontakte has launched a new app for streaming music, capitalising on its growing number of music licensing deals.
The company has courted controversy – and lawsuits – within the music industry in the past with the widespread availability of user-uploaded copyrighted music on its platform. However, having signed agreements with Sony Music and Warner Music as well as some Russian publishers, vKontakte is trying to go legit.
The new app’s name can be translated as ‘Music In Contact’ and was released by United Media Agency. Users can stream music for free for 90 days, after which they will be prompted to start paying a subscription.
The pricing has not been announced, although current on-demand subscription services cost between 149 rubles and 169 rubles a month in Russia: $2.23-$2.53.
Music In Contact is being described as an “experiment” by Russian news site Vedomosti, which predicts that a licensing agreement with Universal Music is coming “in the near future” to complete a full set of majors.
However, possibly ominous is its claim that there is already some of Universal’s catalogue within the new app, which UMA has reportedly promised to remove. The report goes on to claim that vKontakte is committing to at least $10m of guaranteed payments to music rightsholders a year.
For all the past dischord between vKontakte and the music industry, rightsholders are hoping the social network can ignite new growth in the Russian music market. Russia was the 28th biggest market in the world in 2015 according to the IFPI, with a mere $51.7m of trade revenues (of which 45% were digital).
The trade body’s annual report claimed that Russia generated $3.4m of revenues from ad-supported streaming in 2015 and $5.2m from paid-subscription streaming, so a new service guaranteeing $10m a year would have a big impact.
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