Russian right holders don’t receive financial guarantees for digital rights in Russia unlike musical majors

Or in other words – why such major companies like Universal, Warner etc. receive much more money for their copyright in content exploited in Russian social networks and they receive money in advance, but Russian music publishers and record labels receive much lesser, in best case, if nothing at all?

Many social networks are built on a business model assuming dissemination of content like music, movies or pictures. Without such content, mostly copyrighted, social network would not be interesting for internet users. Without opportunity to consume content in any way the user will not spend his time in social network and therefore social network for traffic purposes must propose something interesting for user. Without users social network would not sell its own services like apps or virtual gifts.

Russian social networks are popular mostly thanks to model suggesting dissemination or exploitation of movies, music and pictures. Users don’t clear copyright in content they use or consume. It makes a social network. And the most interesting thing is that in the first place popular social networks have cleared copyright in majors’ music and spend almost all “budget” allocated for these purposes. The rest of this budget, little part of it, is to be allocated among the rest right holders, including Russian right holders.

Russian companies, owning copyright in music, are not happy with situation when majors received “everything” and they received nothing. Russian companies also want minimum financial guarantees for their copyright. But companies, operating social networks and clearing copyright for them, refuse to pay guarantee to Russian publishers and record labels.

Russian right holders are disappointed by the fact, that there is discrimination between Russian and foreign right holders. About 35% of all music in Russian social network Vkontakte belongs to independent labels. “Mystery of sound”, music company, negotiates almost one and half year with UMA – company clearing copyright for Vkontakte – without any success. Commercial director has explained that UMA distinguishes right holders: there is “white”, who receive big financial advances, and there is “the rest”, who receive no guarantees or percentage.

Russian right holders, who is not agree with such practice, considers to file a suit against Vkontakte. If Yandex pays guarantees to Russian music companies, why Vkontakte does not do it? Russian right holders believe Vkontakte’s guarantee payments must be more in 5 times, than Yandex’s guarantee because the audience of Vkontakte is much more than audience of Yandex.Music Service.

But there is other point of view. Russian independent music right holders want “cosmic guarantees” for their rights – millions of roubles for one performer. It is not acceptable for social network. Therefore negotiations with independent labels and music publishers can’t succeed.