Sony Music has "made the decision to exit the Russian marketplace completely and transfer the Russian company and its local roster to local management," the company said in a statement.
The move was taken six months after a major music label made the decision to halt its business operations in Russia in reaction to widespread criticism of the Kremlin and its leader, Vladimir Putin.
"As the war continues to have a devastating humanitarian impact in Ukraine, and sanctions on Russia continue to increase, we can no longer maintain a presence in Russia, effective immediately," the company added.
According to reports, 40 to 50 employees of Sony Music Russia were based there and collaborated with both the record label and The Orchard, the company's independent distribution division.
Based on the insiders who spoke to Billboard, Sony Music has now opted to fully exit the Russian market, and its former Managing Director for Russia, Arina Dmitrieva, has established a local independent firm to take over management of Sony Music's Russian label holdings.
This new company is fully autonomous and separate from Sony Music, and it was previously registered with the Russian Federal Tax Service on August 25, according to Billboard, citing government records and a source familiar with the decision.
Dmitrieva's organization will now represent Sony Music's domestically signed artists in Russia, while foreign stars formerly distributed by Sony Music Russia will be excluded. According to Billboard, employees of Sony Music Russia may receive employment offers from the new independent label.
The company, along with its rivals Universal Music Group and Warner Music Group, has kept offices in Russia while ceasing all business operations in Russia in March. They have also continued to financially support their employees there. However, all additional investments, marketing initiatives, production, and new product introductions have been suspended.
Before the conflict in Ukraine, Dmitrieva was optimistic about the Russian music industry, saying to IFPI in its Global Music Report for 2021 that "there has never been a better time or brighter future for Russia's music market." But now, the battle may have an impact on the Russian music market, which before the war became the 13th-largest music market in the world (according to IFPI data).
In 2021, the Russian music business made $328 million, an increase of 58% from the previous year. That might change now that big labels have stopped operating there, streaming services like Spotify have left the market, and foreign performers have canceled their tours there.
