Russia’s leading music streaming service Zvooq has announced the closure of a $20m Series A funding round led by Ulmart. The leading e-retailer in the country is also joined by Helsinki-based private equity company Essedel Capital.
Zvook says the funds will be used to bolster and promote and improve Zvooq’s ‘freemium’ music streaming models that basically lets third parties integrate free, legal streaming options to their online products like social network accounts, phones, operator packages etc. In a country where music piracy is a fact of life, Zvook has reached a certain success having signed around 500K for over 15 million songs.
“Zvooq’s mission is to bring a quality music listening experience to anyone with a mobile or internet connection across emerging markets” said Victor Frumkin, Co-Founder of Zvooq, “Integrating Zvooq is a way to monetize music for the masses and give consumers legal music where they want it. This is the first real alternative to piracy in these markets”.
International Federation of the Phonographic Industry (IFPI) says global music streaming revenues from services like Zvooq accounted for 56% of the Russian music market’s growth in 2013. Spotify, a leader in the global market is said to be preparing to enter the giant Russian market this year.
“We are bringing order to the chaos of the Russian music market,” said Frumkin. Apart from homeland Russia, the service is operational also in Ukraine, Belarus, Moldova, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Georgia, Armenia and Azerbaijan. Zvooq plans to spend some of the funds to launch in new developing world territories.
Music piracy in Russia remains a major issue, with popular social networks being an easy place to illegally download music. Zvooq’s platform was built specifically to integrate seamlessly into any system using an ad-supported model and large set of social functions within Zvooq as smooth plug-in. The result is that users can continue to listen where they currently spend their time, but will have be listening to licensed music supported by in-stream audio advertising and with the benefit of all the great functionality that Zvooq provides.
“The power of Zvooq is that, once a user starts using the service, they discover a far richer experience than through unlicensed alternatives. Everybody wins,” said Frumkin.