Sony Music Group has become the first major record company to fully exit Russia, six months after suspending operations in the isolated nation in response to its military invasion of neighboring Ukraine.
In a statement sent to Billboard on Wednesday (Sept. 7), Sony Music Group said it has “made the decision to exit the Russian marketplace completely and transfer the Russian company and its local roster to local management.”
“As the war continues to have a devastating humanitarian impact in Ukraine, and sanctions on Russia continue to increase, we can no longer maintain a presence in Russia, effective immediately,” the statement says.
The local management company that will assume control of Sony’s Russian label interests is being set up and headed by former Sony Music Russia managing director Arina Dmitrieva, sources tell Billboard. The transfer and registration of the new company was posted on the Federal Tax Service of Russia website on Aug. 25.
A source familiar with Sony Music’s decision tells Billboard that the new company is a completely independent and separate entity from Sony Music Group and will only represent locally signed artists.
International acts formerly distributed by Sony Music Russia are not included in the terms of the transfer and Sony Music has made an official request to Russian streaming services for them to take down any Sony Music repertoire still available in the country (new releases have been suspended since March, but albums and songs that were uploaded to local streaming platforms prior to the invasion are still widely accessible).
Sony Music Group’s exit from the country comes almost exactly six months after the company suspended operations in Russia in response to the war with Ukraine. Universal Music Group and Warner Music Group also halted operations in early March, freezing all investments, promotional activities, manufacturing and new releases.
Since then, all three major labels have continued to provide financial support to their Russia-based staff and maintain offices there. Sony Music is the first to fully exit the country, cutting all ties with local employees and domestic artists.
Local industry sources say Sony Music Group had between 40 and 50 staff based in Russia, spread between its record label side and indie distribution arm The Orchard. It is expected that some of those staff will be offered jobs with the newly formed independent label, but exact numbers are not known.
In line with Sony Music’s full exit from Russia, The Orchard will henceforth have no presence in the nation and is understood to have either ended or be in the process of winding down any distribution deals it has with Russian labels.
Prior to the war, Russia’s music industry had grown rapidly to become the world’s 13th-largest music market, according to IFPI’s most recent “Global Music Report,” with recorded music revenues of $328 million in 2021 — a 58% jump over the previous year.
In addition to labels, other major music companies that ceased or altered their operations in Russia following the invasion of Ukraine include Spotify, Amazon, Deezer, TikTok, digital distributor FUGA and Live Nation, leaving the country’s once promising music business in disarray.