Spotify has decided to delay its launch in Russia. The BBC Russia has reported that Spotify has also dismissed Alexander Kubaneishvili. He was appointed by Spotify in 2014 in order to operate the company’s division in Russia. Kubaneishvili previously worked at Google, Microsoft, and MTV. Kubaneishvili made the announcement about his dismissal in a letter to his business partners. The letter reportedly stated that Spotify decided to delay their launch due to Russia’s “economic crisis, the political situation, and the new laws governing the Internet.” Russia political issues with the Ukraine are still on-going, and the decline of its currency has also presented a huge economic issue for Spotify. Russia’s currency has lost fifty percent of its value.
Spotify’s biggest concern is probably Russia’s Internet issues. Some people are reporting that the president of Russia is “diluting web freedom- there are fears he is clamping down on media and social networking sites.” The other Internet issue is music piracy. Several music record labels have claimed one of Russia’s largest social networks, VKontakte, is notorious for illegal downloads. Sony Music Russia, Universal Music Russia, and Warner Music UK, all filed copyright infringements against VKontakte last year. In 2014, Spotify’s CEO Daniel Ek said that websites like VKontakte could help build a more stable music industry in Russia. “In Russia, the largest music site is VKontakte, the Russian Facebook. If we can turn those people into paying customers, the music industry would thrive,” Ek stated.
Kubaneishvili does not believe Spotify will launch in Russia any time soon. Spotify was already a registered company in Russia ever since January 2014, and it was supposed to launch in Russia early this year. Spotify has not commented on its decision to delay the launch. Despite not having a music division in Russia, the company is still represented in fifty-eight countries. Spotify recently announced its partnership with Sony Network Entertainment, which will launch PlayStation Music. The partnership will allow PlayStation’s large network of sixty-four million users to integrate their Spotify accounts with their game consoles. Spotify’s music catalog consists of thirty million songs and 1.5 billion playlists. The company has over sixty million active users worldwide and fifteen million paid subscribers.