Russian social networks in talks to legalize music shared by users

Today users of VKontakte can listen to and download music via third-party applications. Source:  Shutterstock

Today users of VKontakte can listen to and download music via third-party applications. Source: Shutterstock

Mail.Ru Group, one of Russia's largest internet companies, is negotiating with major foreign corporations about the legalization of the music that users upload to its sources. Sources interviewed by RBTH believe that Russians are now ready to pay for digital content.

Russian internet company Mail.Ru Group has begun another round of talks with western rights holders about legalizing the music available via its resources, reports business daily Vedomosti, citing the company's employees.

Mail.Ru is being assisted in the negotiations to legalize the music on all its social networks – which include Russia’s largest social network VKontakte – by one of the most recognized lawyers in the American music industry, Joel Katz, who has already arrived in Moscow.

Although Mail.Ru Group has been negotiating with the largest foreign music rights holders - Universal Music, Sony Music and Warner Music/EMI - for some time, they have not yet been able to reach an agreement, since the corporations are naming prices that are not suitable for Mail.Ru Group.

"Each major corporation has calculated on receiving $3.5 million a year from all of Mail.Ru's projects, but the Russian company is only willing to pay that amount to the corporations together," says a source from Vedomosti.

Mail.Ru Group and VKontakte's press offices told RBTH that they hope that "during the next round of talks common ground will be found and that milestone agreements for the entire internet market will be reached."

Problems with legalization

At the end of Sept. 2014 the International Intellectual Property Alliance announced that Russia is still not meeting its obligations concerning the protection of intellectual property - obligations that were assumed after Russia joined the WTO in 2012.

The main pirate resource, according to the alliance, is the VKontakte social network, which recently was fully acquired by Mail.Ru Group. Users of the network are able to upload music files to a giant online library that is accessible to all other users, who can listen to tracks while browsing profiles and news updates, and can even ‘collect’ their favorites into a playlist.

Mail.Ru Group also owns Russia's popular Odnoklassniki and Moi Mir social networks, the Agent Mail.RU and ICQ messengers and the largest mail resource on the Russian internet. Users outside Russia also use these services since they are available in many languages.

Today users of Odnoklassniki, Moi Mir and VKontakte can listen to and download music via third-party applications, which has led rights holders to complain and take legal action against Mail.Ru Group, demanding the removal of the content.

Dmitry Sergeyev, the director of the VK.com (VKontakte) holding company, told Vedomosti that the company is trying to find a solution that would suit the rights holders, but would also take into consideration the users' interests and the preservation of free basic functions.

Russians are ready to pay

According to the Russian Communications Ministry, 8 million Russians paid at least once for using legal internet content in 2013. Experts say that in 2014 the figures will be much higher.

The average cost of using legal content on the Russian internet is between 100 and 500 rubles ($2-$12) a month, which does not constitute high revenues for the companies, whose earnings come principally from the advertisements posted on the sites.

Alexander Tushkanov, Director of the Anti-Piracy Division at cyber security company Group-IB, considers the posting of pirated content "a serious cybercrime." The solution to the problem, Tushkanov says, "would be to create quality, convenient, but inexpensive services with legal content and thoroughly inform the population about it.

Tushkanov explains that Group-IB collaborates with Amediateka, an internet platform on which, for 300 rubles a month (about $8), users can obtain access not only to Russian, but also to international, TV series and films. “The popularity of the resource is growing, which means that Russians are ready to pay for legal content," he says.

Professor Ivan Pankeyev, Director of the Mass Media Rights Center at the journalism faculty at Moscow State University, believes that the current negotiations between the rights owners and the internet companies are an important intermediate phase in the search for a global solution to the problem of illegal internet content.

Ochip Mandzhikov, director of public relations at leading Russian search engine Yandex, says that issues related to the posting of legal content on the internet are not always clear, not only to the users, but to the rights holders themselves.

"Before launching the Yandex.Music service in 2010 we had been negotiating with rights owners for five years," says Mandzhikov. "They could not understand how to regulate copyrights on the streaming service (which allows you to watch content without downloading it)."

Today Yandex.Music is visited by 6-8 million users a month, according to Yandex. All the major international corporations collaborate with the service, which boasts around 18 million posted tracks. While the Yandex.Music service is free, the cost of using the mobile version is 149 rubles ($3.6) a month.

"The collection of payments for the internet application service does not bring in revenue, but the company understands that the demand for using quality legal content is growing, so it intends to develop the service," says Mandzhikov.

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