A number of global music companies have been suspending their businesses and/or services in Russia in the wake of the invasion of Ukraine. In order of their announcements: UMG and PRS for Music; Spotify; Sony Music and Warner Music; then Downtown Music and Kobalt.
However, this does not mean there is a single, industry-wide consensus on cutting ties with Russia, as two stories today on the responses of distributor Believe and collecting societies body CISAC illustrate.
The Guardian reported on Believe’s announcement to labels and artists in Russia about its plans there, including continuing its payouts, with advice on how they can open accounts with banks that are not under sanctions as a result of the invasion.
With criticism brewing of this approach, Believe clarified that it HAS suspended many of its business operations in Russia, including new releases, relationships with local labels and artists, and hiring / investment.
That’s our paraphrasing, but since this article was published, Believe got in touch with the exact wording of how it’s dealing with the situation:
“Alike the other players on the market, we have suspended activities in Russia, including: We have stopped new hiring and investments in Russia; We have stopped releasing music from Russian artists signed under artist services agreements; We have terminated relationships with all Russian artists and labels under international sanctions,” the company told Music Ally.
“No different from other international music companies, Believe is continuing to fulfill its agreed upon obligations to our people, our artists and labels, including its payment obligations to Russian labels in full compliance with international sanctions.”
It’s a reminder of the complexities involved for any international music company that’s been operating in Russia. Cutting ties may not be as simple a process as it sounds, yet a backlash awaits if your approach is perceived (or reported) to be too lenient – however unfairly.
Also under pressure this week is global collecting societies body CISAC. Some of its members have suspended their relationships with Russian collecting society RAO following the invasion, but there has been encouragement for CISAC to take its own action and suspend the PRO. At this point, the body is pushing back against that pressure.
“When it comes to CISAC members’ business relationships with Russia, royalty flows between societies and Russian CMOs have already ceased due to financial and banking sanctions,” said CISAC in a statement yesterday, as reported by Variety.
“After careful consideration, the CISAC Board has decided that each individual society should decide on whether to maintain their business relationships with Russian societies, and what the terms of any relationship should be… While abhorring the actions of the Russian armed forces, CISAC is not empowered to impose sanctions on member societies based only on the actions of their government.”
CISAC also warned that “Russian authors, just as their counterparts elsewhere, cannot be blamed for the grotesque actions of their government”. It’s an illustration of the three key drivers of the decisions being made by music industry companies and entities now.
First, the legal requirements of the fast-evolving sanctions situation. Second, the moral (but voluntary) implications of operating in Russia, including taking into account the views of employees, artists and fans.
And third, the sense of responsibility to artists and staff both in Ukraine – corporate donations and relief funds are springing up every day, which is welcome – and also in Russia, where their support for the war should not be assumed, and indeed, where some have bravely spoken out or joined protests.
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