Spotify Reportedly Cancels Launch in Russia

Russian Police Choir perform "Get Lucky" at the opening of the Olympics in Sochi, Russia

Streaming music service Spotify has pumped the brakes on its planned launch in Russia, citing a growing list of negative factors in the country, according to reports. Spotify's would-be head of Russia, Alexander Kubaneishvili, told the Tass news service that he was dismissed, and that the service will not launch any time soon.

"I regret to inform you that Spotify refused to launch in Russia in the foreseeable future," he said, according to a BBC Russia report. "There are several reasons -- the economic crisis, the political situation, the new laws governing the Internet."

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A Spotify representative declined to comment on the reports. Kubaneishvili joined Spotify in March or April of 2014, following a two-year stint at Google. He previously held sales positions at Microsoft, Gigaphone, and MTV.

Spotify had been targeting an early-2015 launch date in Russia, where a subscription would have cost 500 rubles, or about $7 US. But Russia's economy, hurt by plummeting oil prices and Western sanctions over its actions in Crimea and Ukraine, have sent the Russian currency plummeting. Since early 2014, the ruble has lost 50 percent of its value and is trading at 66 rubles for a US dollar as opposed to 33 rubles for a dollar in January 2014. Standard & Poor's recently downgraded Russia's credit rating to junk for the first time in a decade.

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As for new Internet laws, Kubaneishvili may be referring to longstanding fears that Russian President Vladimir Putin is planning to clamp down on media and social networking sites in the country. Indeed, Russia's largest website, the Facebook-like VKontakte, has come under fire from major labels for hosting pirated content. Spotify CEO Daniel Ek said in July that sites like VKontakte could someday be the key to a healthier music industry in Russia and other parts of the world.

"In Russia, the largest music site is VKontakte, the Russian Facebook," he said. "If we can turn those people into paying customers, the music industry would thrive."