The Facebook of Russia, VKontakte, has launched a streaming music app in a bid to transform its controversial service into a fully licensed platform.
iPhone and iPad users can stream music for an initial free trial period of 90 days, after which they’ll charged a subscription fee, the amount of which is yet to be announced.
A report from Russian news website Vedomosti says vKontake is committing to a minimum of $10m a year in payments to rights-holders.
It’s quite the commitment; in 2015, the IFPI reported that ad-supported streaming in Russia generated $3.4m in revenues in 2015, and $5.2m from paid-subscription streaming.
In 2014, Warner Music, Sony and Universal filed copyright a infringement case against VK due to the amount of user-generated content it allows to be uploaded on to its service.
The record labels asked for an order requiring VK to implement fingerprinting technology to delete copyrighted works and prevent them from being re-uploaded.
In addition, Sony, Warner and Universal demanded compensation to the tune of 50 million rubles ($1.4 million) from the social networking site.
Sony Music Entertainment settled out of court with the platform in July 2015 – an agreement believed to be contingent on VK’s promise to begin monetising its content.
Universal and Warner pressed on with legal action, but the labels suffered a major legal defeat in March this year when the Saint Petersburg & Leningradsky Region Appeal Court overturned an earlier ruling – finding that VK was not liable for copyright infringement.
Warner has since bowed out of the battle with its own out of court settlement, leaving Universal to fight alone.
Home to an estimated 144 million people, Russia is the world’s ninth biggest country but generates less cash from legal recorded music than Poland, Denmark and Switzerland.
MBW analysis revealed that on average, Russia’s citizens are paying a woeful $0.50 each on music a year.
The core reason for this painfully small per-person payout is piracy.
Last year the Russian Government seemed to start to finally crack down on copyright infringement after extending a tough anti-piracy law to include multimedia content – covering music, e-books and software.
In theory, it meant that the Russian High Court can order ISPs and website hosting companies to permanently block websites that repeatedly infringe copyright.
VK is said to have over 300m registered users, with 85m of those active.
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