Major copyright holders have repeatedly accused Mail.ru Group of piracy / Evgeny Razumny / Vedomosti

Mail.ru Group will buy 80% of United Media Agency (UMA), which concludes licensing agreements on its behalf. This is stated in a statement by Mail.ru Group.

The option agreement to buy out the stake was signed on December 27, and the option expires on May 21, 2020. However, Mail.ru Group plans to close the deal in Q1 2019, subject to receiving preliminary consent from the Federal Antimonopoly Service (FAS). The company has not yet submitted documents to the service for approval of the deal, a Mail.Ru Group representative told Vedomosti. The deal is worth $97 million.

Large copyright holders have repeatedly accused Mail.ru Group, and especially its fastest growing asset, VKontakte, of piracy. In 2016, UMA developed the first legal application for Mail.Ru Group, which allowed listening to music legally. Mail.ru Group transferred to UMA the rights to conclude licensing agreements with copyright holders. In April 2017, the company's services VKontakte, Odnoklassniki and Boom introduced a paid subscription for listening to music, but users retained the right to listen to music for free without restrictions. Social network users were in no hurry to sign up for a paid subscription. In November 2017, the company reduced the time of free background listening to half an hour. To listen to music for longer than 30 minutes, a user can sign up for a subscription for which he must pay 149 rubles monthly, gaining access to the music services of all three social networks.

Following these measures, users began to subscribe to Mail.ru Group music services more actively. The number of activated paid and trial subscriptions to VKontakte, Odnoklassniki and the Boom mobile app exceeded 1.5 million in June, the company reported earlier. The number of subscribers now exceeds 2 million, Mail.Ru Group said in a statement.

UMA's revenue for 2018 is estimated at approximately RUB 1.4 billion, the company reports. The deal will not have a significant impact on EBITDA. In May 2018, Mail.Ru Group bought out 20% of UMA for RUB 1.4 billion, the company reported earlier. The company will buy out the remaining 80% from White Peak Investments (IOM) PCC Limited, Crescent & Star Investment Company LLC and others, Mail.ru Group said in a statement.

“We expect further significant growth in the subscriber base and, for our part, we plan to expand the portfolio of our services, including through a variety of formats,” the statement quotes Mail.ru Group CEO Boris Dobrodeev as saying.

Mail.ru Group to Buy Out Social Media Music Licensing Partner