Russian Economic Crisis Kills Spotify Launch in Nation as Ruble Continues to Fall; Will Piracy Grow?

Russian political and economic issues continue to rage and now it's music listeners in the Eurasian nation who are suffering as Spotify has reportedly pulled the plug on its plans to launch a Russian variant during early 2015. Although the company didn't respond to calls for comment from Billboard and other sources, a recently dismissed employee from the project suggested that it was dead.

"I regret to inform you that Spotify refused to launch in Russia in the foreseeable future," Alexander Kubaneishvili told BBC Russia. "There are several reasons-the economic crisis, the political situation, the new laws governing the Internet."

Kubaneishvili had been hired by Spotify to oversee the launch of the streaming service in Russia but he told a news service in the country that he had been dismissed.

All of the reasons for the cancellation could have been assumed even if Kubaneishvili hadn't listed them. Russia is currently undergoing a major economic crisis stemming from the devaluation of the ruble over the last year, losing half of its value (The exchange rate has fallen from 33 to the American dollar to 66 to the dollar this year). Sanctions from the nation's military activity in eastern Ukraine and the plummeting price of oil has crippled Russia, a major exporter. Standard & Poor have downgraded the nation's credit rating to "junk."

Spotify was slated to cost around 500 rubles for a subscription (around $7) however even that seems steep in the face of a depression.

The political situation and "the new laws" most likely refer to the same event, the tightening of internet restrictions in the light of piracy headlines in the nation. VKontakte, Russia's equivalent to Facebook, has taken a beating from the government over the storage of pirated material on its pages. Although Spotify would operate by the book, the Kremlin hasn't been shy about blurring legalities to punish foreign companies, such as when a wave of McDonald's restaurants were spontaneously closed for "sanitary violations" following the sanctions brought against the country.

Ironic that Russia, now more serious in its fight against its awful piracy record, may be squashing an outlet that would have steered many away from more illegal paths.

Tags

Spotify, Russia