Business

Russian Bank Sber Acquires Muzlab to Target Business Streaming Market

Sberbank
KIRILL KUDRYAVTSEV/AFP via Getty Images

The logo of Russia's state-owned bank Sberbank (reading "Sber") is seen on one of its offices in central Moscow on April 12, 2021.

The acquisition follows Sber's purchase of Zvuk in September.

MOSCOW — Russia's largest state-run bank, Sber, has acquired the local music streaming company Muzlab to merge it with its own service, SberZvuk, in a bid to beef up its streaming business.

Sber hopes that the merger of SberZvuk and Muzlab, which focuses on the business market, will enable it to achieve synergies and create new opportunities to grow in both the consumer and business segments, Michael Ilyichev, CEO of SberZvuk, tells Billboard.

"After the Muzlab deal, new prospects for targeting both [segments] are opening up," he says. "For instance, you come to a restaurant, and one cool track after another is playing there, and you would like to get the entire playlist. Now it will be possible."

According to Ilyichev, as a result of a merger between SberZvuk and Muzlab, the combined company will offer a larger library to business streaming customers, while individual consumers will be able to access playlists at cafés, restaurants and other venue and continue to listen to tracks they like.

"In addition, SberZvuk users will be able to get more actively involved in businesses' activities thanks to playlists and their profiles created in SberZvuk," he says. "They will be able to get news and offers from businesses, while artists will get more opportunities for monetizing their music."

Founded in 2016, Muzlab operates on a subscription model (an average-sized restaurant pays roughly $20 per month) and is the largest player in Russia's B2B streaming segment. In recent years, a wave of newer, all-digital B2B platforms like Soundtrack Your Brand in Sweden have begun challenging more established players like Mood Media, Rockbot and PlayNetwork, which target brick-and-mortar businesses for streaming music subscriptions.

The challenge for these companies is to persuade businesses to pay more for music than they would by using consumer streaming services like Spotify, even though those services don't provide the public performance licenses needed to play music at retail.

SberZvuk was launched in September 2020 when Sber acquired the local music streaming service Zvuk as part of a move to reinvent itself as a tech company offering various services.

Sber aims to use its huge customer base, which it says is 100 million clients, to establish itself as a major player in Russia's crowded music streaming market, alongside Apple Music, Spotify (which launched in July) and local rivals VKontakte and Yandex Music.

The value of the Muzlab deal was not disclosed.

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