The music industry is battling to stop piracy through Russia’s largest social network so that it can turn the country from a digital backwater in to a top music market.
vKontakte, which is often called a Facebook copycat for its similar features and design, includes built-in file sharing.
In a case brought by one label group, Gala, St Peterburg’s commercial court in January ruled vKontakte in breach of copyright.
That buoyed labels’ global representative group, the International Federation of the Phonographic Industry.
But now an appeal sought by vKontake is set to begin on May 17, and labels remain frustrated.
“Russia is another potentially exciting growth market for music,” IFPI CEO Frances Moore wrote in her organisation’s annual report in March.
“Though it is currently being held back by a culture of copyright infringement that is epitomised by the music service run by the leading social networking site vKontakte.
“If Russia’s burgeoning legitimate business can effectively protect itself against such infringement, the country could become a top 10 music market.”
Latest data shows Russia at 23 on the IFPI’s table of the world’s 58 music largest markets. And, as physical music slides around the world, Russia’s outlook, even in digital, is getting worse…
- In 2011, recorded music retail sales from digital actually fell by 40 percent in Russia, to $43.3 million, according to IFPI.
- That made Russia one of only nine countries in the world to see negative digital, as well as physical, progress.
- Labels in 2011 made less from digital than they did back in 2009.
- Russian music revenue is a lowly $0.60 per capita – 23 times smaller than the U.S..
- That is despite Russia posting Europe’s third-highest GDP growth last year.
In Russia, 13 music services have licenses – Beeline, IbizaDanceClub.com, Deezer, Fidel, iviMusic, Megafon, Mp3.ru, MTS, Muz.ru, Nokia Music, Tele2, Yandex Music, YouTube and Zvooq.