Under communism, the country had just one record label, Melodiya, which was strictly controlled by the government, which made sure that only “safe” records and artists were released and promoted. FM radio simply didn’t exist. Concerts were managed by state-run agencies, and rock musicians were mostly barred from touring. It would be charitable to characterize the last century of the Russian music industry as barebones.
Over the next two decades [following Mikhail Gorbachev’s perestroika reforms], a music industry was allowed to mature with little or no government involvement, eventually growing to be worth $2 billion annually by the early ’10s, and which faced the same challenges as other, more mature markets, such as the continuing decline in physical sales and the question of growing streaming revenues.
Last year brought the symbolic end of the physical format era in Russia; the segment’s contraction led to the closure of all remaining brick-and mortar outlets of Soyuz, once Russia’s biggest nationwide CD chain.
Meanwhile, companies in the digital space, especially streaming services such as Zvooq and Yandex.Music (the music service of Yandex, “the Russian Google”) appear to be doing well.
“We’ve seen local music services closing down because of [an overall economic downturn in Russia], or losing part of their catalogue, and foreign players leaving,” Konstantin Vorontsov, head of Yandex.Music, told Billboard. “However, demand for digital music isn’t declining… there is growth.”