Russian Digital Services Push Restrictions on Free Music Streaming

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Major Russian social networking websites, VKontakte and Odnoklassniki, and the music streaming service Boom have introduced restrictions on free music streaming at the request of rights holders as the owner, Mail.ru Group, moves to monetize the streaming service, which replaced illegitimate, user-generated content.

"Free streaming in the background mode on VKontakte, Odnoklassniki and Boom will now be limited to 30 minutes a day," a spokesperson for United Media Agency (UMA), which handles music licensing deals for Mail.ru Group, told Billboard.

"Users can remove the restrictions and get access to additional features by launching a paid subscription," she went on to say.

The subscription costs 149 rubles ($2.6) a month, and Mail.Ru Group has not revealed the number of users who subscribed to the service since it was launched six months ago.

Mail.Ru Group has licensing deals with Universal Music Group, Warner Music Group, Sony Music Entertainment, Merlin Network and local labels, and it earlier said that the rights holders had been pushing for restrictions on free streaming.

"The subscription service allows rights holders to make money on their tracks," the UMA spokesperson said. "Thanks to the partnerships with major music labels, we are expanding our library of top-quality music tracks."

The music service, launched by Mail.Ru Group in early May, replaced user-generated music content, which was previously available on VKontakte and caused numerous litigations between rights holders and the social media and a reputation of "Russia's largest music pirate."

The biggest lawsuit was filed in in 2014 by Universal Music Group, Sony Music and Warner Music Group and led to licensing agreements between VKontakte and the three major labels, singed in 2015-2016. More similar agreements with foreign and local rights holders followed.

Mail.Ru Group's deal with UMG, Warner and Sony are reportedly worth between $2 million and $2.5 million a year for each label, based on minimum guarantee and revenue sharing.

Mail.Ru Group hasn't disclosed how subscription revenues are to be shared with the rights holders.


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