Russian Digital Music Site Muz.ru Suspends Operations, Citing Piracy

Muz.ru, one of Russia's oldest and once-largest legitimate online music service, has suspended operations, citing online piracy and poor overall economic conditions as reasons for the move.

Users will be able to download previously purchased tracks through January 31, Muz.ru announced, after which its web site will only publish music-related news and stories.

"Muz.ru has played an important role in the development of the entire digital music sector, and we hope that its users will stay on the territory of high-quality legitimate music," read a statement on the service's web site.

"When the project was launched, there were big hopes for fighting online piracy," Konstantin Bogdanov, general director of Muz.ru, told Billboard. "The market is large and promising, but legitimate music services cannot compete with pirates."

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According to Bogdanov, by 2015, the level of piracy in online music declined only insignificantly, while licensing fees remain high, users' ability to pay for online music is limited and competition among legitimate online music services is high.

"The service isn't shutting down," he said. "But it is being suspended until the economic situation and legal conditions improve."

Muz.ru was launched by the investment and financial group Kapital and broadcaster Russian Media Group back in 2008 and at the time was one of the largest legitimate online music services.

Muz.ru originally offered tracks for a-la-carte download and later added a premium subscription option and a streaming service operating on the ad-sponsored model. It had 450,000 registered users.

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According to the data base Kartoteka.ru, in 2014, Muz.ru showed net losses of 35 million rubles ($500,000 at the current exchange rate).

Muz.ru was the last of Russia's first-generation legitimate music services to stop operation. Over the last few years, Fidel.ru, Yota.Music, Stereokiller.ru and SoundKey.ru have also shut down.

iTunes, Google Play Music and Yandex.Music are currently the main players in Russia's digital music sector.