In what is rapidly becoming a mass music exodus out of Russia, Kobalt and Downtown have become the third and fourth major companies to announce on Thursday that they are suspending business activity in Russia due to the country’s invasion of Ukraine. Of the three global major labels, Sony and Warner announced their pullout within an hour of each other on Thursday morning, and Universal made the move on Tuesday.
Kobalt’s move is doubly significant because although it is a global company, Kobalt was founded in London by Swedish-born Willard Ahdritz and in many ways is a European company. A rep for France-based label and distributor Believe Music, which has a substantial market presence and 40-employee staff in the country, tells Variety that it has “no plans to suspend operations in Russia for the moment but we are monitoring the situation very closely as it is developing constantly.”
Kobalt’s statement reads: “Like the rest of the world, we at Kobalt are deeply unsettled by Russia’s unprovoked and unlawful invasion of Ukraine. We urge and are hopeful for a peaceful resolution to the conflict soon.
“To aid the humanitarian efforts on the ground, Kobalt has made donations to the following organizations: Global Giving – Ukraine Crisis Relief Fund, International Rescue Committee, and Save the Children. In addition, Kobalt will suspend all business activity in Russia and have voiced our support for any decisions that would cut off the local Russian collection society, RAO, from the network of collection societies.”
In an internal note obtained by Variety, Downtown CEO Andrew Bergman wrote: “With immediate effect, Downtown is suspending all business with Russia. This means we will not distribute any new music to Russian DSPs including Yandex, VKontakte and Zvooq, we will terminate all local music publishing royalty collection activities and we will exclude Russia from all worldwide synchronization licenses.
“While music rights matters have historically been managed on a local basis, on this issue it is our belief that the global music industry should be speaking with one voice. To that end, we are encouraging all international music organizations to join in solidarity with Ukraine. As you know, with many friends, family and team members in Ukraine directly affected by Russia’s aggression, this crisis is near and dear to all of us at Downtown. We are donating funds to NGOs including ICRC, the International Rescue Committee and UNICEF (and have implemented an employee matching program) that both support activities on the ground in Ukraine as well as the more than 2 million refugees that have been forced out of their homes.
“While we’re hopeful that a peace agreement will be reached soon, we know that any road to Ukraine’s recovery will be a long one. We plan to continue monitoring the situation and providing support in any and all ways that we can.”
Kobalt’s mention of RAO, which is roughly the Russian equivalent of ASCAP or BMI, is notable because many in the publishing and songwriter community have called for CISAC, the global governing body of such collection societies, announced a Ukraine relief fund on Wednesday but has not suspended operations in Russia.
Early Tuesday, the U.K.’s performing rights organization, PRS for Music, said it has formally and immediately suspended its rights representation relationship with RAO, the Russian collecting society for musical works, “pending confirmation of its separation from the Russian Government and those individuals and companies on the sanctions lists.” BMI in the U.S. made a similar statement this week: “BMI has suspended its copyright representation payments to RAO, the Russian collection society for musical works. Additionally, we are working with CISAC on a broader effort that will help benefit creators in the Ukraine and surrounding areas, while also providing humanitarian aid to those who are so desperately in need.”
SIAE, the Italian performing rights organization, also has suspended payments to RAO. Sources say a number of publishers in the US have unilaterally stopped issuing sync licenses that include Russia.