Experts called investments in streaming audio services inappropriate

The audio services market is currently overheated, and entering it with a new product means wasting huge resources with slim chances of success. Tatiana Roik, CEO of Lotus PR agency, told Izvestia about this, commenting on Gazprom-Media Holding's decision to abandon the creation of the Noise service with radio stations, music and podcasts.

The company announced plans to launch an audio service in August 2023. It was expected that streaming would start functioning as part of the work on the technological development of the Premier online cinema. However, on June 20, Alexander Zharov, CEO of Gazprom-Media, told Forbes on the sidelines of the SPIEF that these plans had been abandoned, noting that due to potential marketing costs, "the payback period is beyond reasonable."

Experts interviewed by Izvestia note that the company is now focusing more attention on the development of its video services, which also have the ability to stream and host other creative content.

"In such a situation, it is logical not to disperse, but to focus on what is already working and where the holding has a strong position. Namely, Premier and Rutube, which have been showing good growth recently," Tatiana Roik believes.

Economist Andrey Barkhota also says that the segment of paid audio-streaming services has a high level of saturation and competition. At the same time, according to him, the peculiarity of investments in this area is that the share of expenses on marketing and the creation of exclusive partnerships and content significantly exceeds the share of traditional infrastructure investments.

Gazprom-Media, apparently, reasonably assessed the prospects for the development of the Rutube service and probably decided to form audio streaming services within this agglomeration," said Barkhota.

At the same time, Denis Kuskov, CEO of the Telecom Daily information and analytical agency, noted that the audio services market in Russia is actively developing after the departure of foreign Apple Music and Spotify, and there are many players in Russia who work on co-branded products.

"Gazprom-Media has a lot of assets that work in audio streaming, work in video streaming, such as Premier, Rutube. Perhaps the company has decided for itself that now, with such a large number of services, it is not advisable to create a separate resource," said Denis Kuskov.

In addition, experts note the success of the holding's services: Rutube is already ahead of YouTube in terms of views, and other video projects are also successfully developing, from online cinemas to individual social media services.