Russian Streaming Startup Zvooq Has a Unique Strategy (and Just Received $20M in Funding)

Zvooq also has a different approach to pricing. Rather than charge a fee for unlimited, advertising-free access -- the Spotify pricing model -- Zvooq charges two monthly rates, 33 rubles ($0.91) and 66 rubles ($1.82), that lets users listen to three albums a day and seven albums a day, respectively.

The funds will have two primary uses. First, Zvooq will "bolster and promote" its platform that can integrate directly into social networks and cellular carriers’ offerings. Second, the funds will help begin a rollout into "certain developing world territories."

Music is shifting from piracy to legal services in Russia. As the Moscow Times noted, new piracy laws in the country are helping nudge the market in a legal direction. In March, the lower house of the legislature passed a bill that would extend anti-piracy law to include all copyrighted works and related rights. Weeks later, the three major music groups charged Russian social networking site VKontakte with a $1.4-million damage claim.

Like elsewhere in the world, piracy in Russia is both a threat and an opportunity. Seeing the potential in the country of 143 million, Spotify CEO Daniel Ek said in a July interview that the country's largest music site is VKontakte. "If we can turn those people into paying customers, the music industry would thrive."

And that's exactly how Zvooq is positioning itself. "We are bringing order to the chaos of the Russian music market,” said co-founder Victor Frumkin in the press release announcing the funding. “By delivering the best end-user listening experience and an easy-to-integrate service for our partners we create an enjoyable, legal music market that brings revenue and awareness to artists.”