The IFPI and the global recording industry have welcomed the verdict of the Russian appeal court (17th May 2012) that confirmed social networking and downloading site vKontakte is liable for copyright infringement. The case against vKontakte was brought by SBA Music Publishing and SBA Production and members of the Gala Records Music Group, a subsidiary of EMI in Russia. The cases were based on vKontakte making many of Gala’s music compositions and sound recordings available without licensing agreements in place.
The judgment by the Saint Petersburg appeal court upheld the earlier ruling by the commercial (“Arbitrazh”) Court of Saint Petersburg in January.Frances Moore, chief executive of IFPI, said : “This judgment sends a clear signal to those in Russia that seek to build their businesses on the back of other people’s content. We urge vKontakte to take immediate steps to stop its service being used to infringe copyright on a massive scale" adding “Widespread digital piracy is preventing Russia from developing a thriving legitimate digital music sector and this in turn denies Russian artists a chance of success and starves them of investment by producers.”
The IFPI say that the Russian market has declined substantially since 2007, from US$191 million to US$76.6 million. During that time, the digital market has grown, yet last year saw a substantial fall even in digital revenue, which the IFPI attribute to piracy vKontakte is Russia’s most popular online entertainment platform with more than 110 million registered users and is one of the top 50 most visited sites in the world, attracting more traffic than BBC Online or CNN.com. Its valued at upwards of $1.5 billion (though in facebook world, who knows what its worth today - or what it might be worth tomorrow!). The unlicensed vKontakte music service allows streaming of music from an extensive catalogue of Russian and international sound recordings and encourages software developers to create apps for illegal downloading of content using vKontakte.