Russia's Zvooq Streaming Service Secures $5M Investment, Partners With Tele2
In 2014, Spotify registered a Russian company, which still shows as active in the SPARK-Interfax data base, and spent most part of the year preparing for launch, tentatively scheduled for the first half of 2015. However, in February 2015, the company backed off, closed the local office and fired its head Alexander Kubaneishvili.
The company did not explain its reasons for the move, but the Russian news service RBC quoted a source close to Spotify as saying that the main reasons for canceling the Russian launch were the slumping economy and a new personal-data law, which was to come into effect in Russia on September. 1, 2015.
Under the law, Russians' personal data have to be stored in Russia only, and Spotify, as a cloud service, reportedly was not sure how to comply with the regulation.
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Meanwhile, Russia's digital music market defied expectations and grew by 11 percent to $30.4 million in 2015, according to PricewaterhouseCoopers.
The main players in Russia's streaming segment are Apple Music, the ailing Australian company Guvera and local services Yandex.Music, a division of the "Russian Google,” Yandex, and Zvooq, backed by the retailer Ulmart.