Major labels take Russia’s ‘Facebook’ to court over piracy

Sony Music Russia, Universal Music Russia and Warner Music UK have taken Russian social media site VKontakte to court over claims it allows wide scale piracy by users.

VK enables users to upload copyrighted media to their profiles without having secured licensing deals with the rights holders. Now, the labels demand the site pay damages of £1 million and implement fingerprint technology that deletes copyrighted material along with preventing re-uploading.

Numerous warnings from regulators have failed to inspire any changes to VK’s current mode of operation, and recording industry reps NFMI (National Federation of the Music Industry) and IFPI (International Federation of the Phonographic Industry) have joined forces with the labels to support the court action.

Having spoken with the BBC, IFPI Chief Frances Moore stated that VK was "designed for copyright infringement on a large scale". She continued, "We have encouraged VK to cease its infringements and negotiate with record companies to become a licensed service. To date the company has taken no meaningful steps to tackle the problem."

There’s little doubt that licensed digital music services like Yandex, Trava, iTunes and Deezer pay a price for VK’s enabling of piracy. According to IFPI, growth of these services in Russia is only US$0.50 per capita whilst the European average is considerably larger at US$8.40.

Russia is currently placing outside the top 20 international music markets despite its potential to be a top 10 in the world market.

Joe Karangis, media piracy expert and co-author of a report into media piracy in emerging economies explains, "Part of the problem is that ’piracy’ is so entrenched in Russia’s consumer culture. Long after the fall of the Soviet Union, many western cultural goods were officially censored - inaccessible to Soviet audiences.

Mr Karangis also suggests that the scale of damages being sought is indicative of an industry desire for VK to enter into a licensing deal.

A deal would enable the record labels to control their releases and artists - and would afford VK the rights in Russia where perhaps they know the market better. Thus, the artist would get more promotion together with sizeable cash increases for the labels.

Should the court case prove successful, consumers will have access to music via different licensed channels and formats, moving Russia closer to an open and more competitive music market.