Russia’s Yandex Doubles Music Subscriptions Ahead of Spotify Entry

Yandex.Music, the music streaming service in Russia owned by online giant Yandex, has doubled its subscriber base in one year, growing to nearly two million.

The service’s growing popularity reflects a switch in music consumption from downloads to streaming, said Yandex’ Arkady Volozh, co-owner and general director.

Yandex.Music was launched in 2010 and reached 250,000 paid subscribers by late 2016. In June 2018, Yandex.Music reported a paid subscriber number of 1 million.

The service currently operates in Russia, Kazakhstan, Armenia, Azerbaijan, Tadzhikistan, Turkmenistan, Uzbekistan, Georgia, Moldova, Kyrgyzstan and Belarus. In October 2018, it took the first step towards expansion beyond the former Soviet Union by launching in Israel.

Russia is paved for intensifying consumption. London’s UMA Music provides music licensing for two major social networks, VKontakte and Odnoklassniki, and for UMA’s own mobile app, called BOOM. They’re currently the largest music streaming platforms in Russia and the former Soviet republics. Spotify plans to launch in Russia later this year.

UMA is relying on a level of social media integration that’s rare on music streaming platforms. “You look for the news, chat with your friends and music is always there,” says Vera Gorbulenko, marketing director at UMA.

Unlike Spotify, UMA also allows user-generated content so anyone can put their music on the platform.

Table: Russian Music Streaming Forecast

Relative GrowthStreaming is the fastest growing segment of the Russian music industry
SalesIn 2021, sales from streaming services will reach 18.6 billion rubles (CAGR will be 58%)
MarketThe Russian music streaming market totaled RUB 4.7 billion in 2018
RevenuesSubscription revenues are expected to amount to RUB 12.5 billion, while advertising income will grow to RUB 6.1 billion by 2021
CompetitionEight market players are active in Russia, including Apple Music, Deezer and YouTube Music, as well as local players such as Yandex.Music, Boom/VK Music, Zvooq and mobile operators.

Source: J’son and Partners Consulting

The Yandex.Music app allows users to stream top charts and curated playlists, play albums and individual tracks and access the Yandex.Radio service, which offers tracks selected for various activities and moods.

Yandex.Music is available at 169 rubles ($2.6) per month with a three-month free trial period or at 1,690 rubles ($26) per year.

Russia Positioned as Breakaway Streaming Market

According to the IFPI, music streaming in Russia accounts for 81% of its recorded music total revenue, which is among the highest figures in Europe, behind only Norway, Sweden, Denmark, Finland and Iceland.

The total number of Russian music streaming services’ paid subscribers is unknown because major global players, such as Apple Music and Google Play Music, don’t uniformly reveal their subscriber figures.

Spotify planned to launch here in 2015 but canceled its plans amid a slowing economy, unstable national currency and personal-data protection legislation stipulating that Russians’ personal data should be stored inside the country.

However, according to J’son and Partners’ report, the existing music streaming services are expected to drive up the segment’s value at a rate of 58% annually over the next three years.

The consulting firm predicted that in 2021, Russia’s music streaming services will post revenue of 18.6 billion rubles ($286.1 million) thanks to a range of factors, including the government’s crackdown on online piracy and a steady growth in the number of mobile devices, which are heavily used for streaming music.

Yandex: What to Know

  • Specializes in Internet-related products and services, including search and information services, eCommerce, transportation, navigation, mobile applications, and online advertising
  • Serves audiences in Russia and the Commonwealth of Independent States. Company founders and most of the team members are located in Russia. It has 18 commercial offices worldwide.
  • Yandex is the largest technology company in Russia and largest search engine on the internet in Russian, with a market share of over 52%. The Yandex.ru home page is the 4th most popular website in Russia and the 5th largest search engine worldwide.

Pictured: Russian President Vladimir Putin with Yandex CEO Arkady Volozh outside of the Yandex headquarters in Moscow.