The Russian Federation is the world leader in the share of music listeners through streaming services. According to the International Federation of Phonogram Producers (IFPI), streaming services for listening to music in the Russian Federation are used by more than 87% of all Internet users. The TOP 5 also includes Mexico (81%), Brazil (77%), Sweden (74%) and Argentina (70%). According to other data, the leaders in the country context are the USA, India, and China.
In 2020, the volume of the Russian music streaming segment, according to PwC, amounted to 12 billion rubles and reached a share of 67% in the structure of the total revenue of the music industry.
Estimates of 2020 results from other analytical agencies are more optimistic: 12.6 billion rubles ($167 million, IFZ), 14.7 billion rubles (J'son and Partners Consulting), 18 billion rubles (ARG).
In 2021, according to preliminary estimates of analysts, the streaming music segment may grow to 15-22 billion rubles.
According to expert estimates, the share of advertising revenue in the total revenue of music streaming services is more than 60%, and the share of revenue received under the subscription model is 33%. This ratio is unlikely to change in the near future. But the growth of interest in paid subscription is observed. Thus, according to a Delloite study, in 2020, 48% of respondents used a subscription to music services.
Competition is increasing among music services.
The leaders of the Russian music streaming market in 2020 were Yandex.Music and VKontakte Music (formerly boom/VK music), which are based on the development of their combo subscriptions.
Also, a significant event in 2020 was the acquisition by Sberbank PJSC of the pioneer of the streaming market of the Sound service (2010), relaunched under the Sberbank brand and became part of the ecosystem of the state bank. Sberbank PJSC intends to make the audio service one of the leading players in the Russian market. So, in 2021, Sberbank was the first among Russian audio services to offer users high-quality Hi-Fi music. The audio service also introduced an application for Studio musicians, designed to communicate with the audience in the format of audio rooms and promote their own tracks. In addition, virtual assistants have appeared in the Sberbank audio service to provide users with additional features. As a result, in 2021, Sberbank entered the TOP10 most popular audio services in social networks, according to the analyst's version.
It should be noted that large corporations have been using music for a long time to create customer loyalty to the entire ecosystem. For example, the partnership of the Yandex.Music service and Microsoft (2015), the acquisition and development of the boom service by the corporation can serve as an example Mail.ru group (year 2018).
In March 2021, one of the most famous pirate music portals changed its business model - Zaycev.Net . Now it is a full–fledged streaming service where you can listen to music with ads or by subscription. In the mid-2000s, it was one of the key music services in Runet, allowing you to upload and download tracks. But due to problems with copyright holders and threats of blocking, it was decided to close the music download option for users and reduce the music library from 10 million to 200 thousand tracks.
In conditions of intense competition, consolidation of key music labels is observed in order to strengthen market positions. So, in August 2021, a new musical zvonko group conglomerate was introduced, uniting the leading Russian music labels, which account for about 20% of the music streaming market in the Russian Federation.
In particular, we are talking about the First Musical label, the National Music Publishing House, the Soyuz Studio, the SOYUZ Studio, effective recordings. An important component of ZVONKO GROUP has become the only Russian content aggregator delivering music to digital storefronts – ZVONKO Digital (National Digital Aggregator). Thanks to this service, Russian companies can post music content on more than 150 digital storefronts in different countries of the world. According to PwC analysts, in addition to forming a major full-cycle player, the advantages of the new holding will be the combination of expertise and back office (financial, legal, partly marketing services).
There is a growing interest of music streaming services and labels in children's audio content. This is partly due to quarantine measures in 2020. According to industry participants, the addition of children's conversational content to the audio library is an expansion of the audience and the use of the existing ecosystem of services for multiplatformity.
In the near future, music streaming will remain the main way of consuming and monetizing audio content. According to Statista, the volume of this market in 2021 amounted to 2.1 billion rubles ($ 28.2 million). The segment of downloadable digital music content being displaced by streaming music services will gradually shrink. Separately, it is necessary to note a relatively new trend associated with the publication / reissue of music albums in the form of a mobile application. This format can include not only music tracks, but also other illustrative material: interviews, rare photos, videos from rehearsals, footage from documentaries, etc.
