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. Last Updated: 07/27/2016

BMG Spends Millions Growing Locally

Never mind the rampant piracy, world No. 3 recoding company BMG is looking to get more active in Russia.

With $1 billion a year in potential sales, BMG vice president Berd Fakesh told reporters this week that BMG considers Russia it’s third most important market after the United States and Europe.

Fakesh wouldn’t put an exact figure on how much BMG planned to invest in its expansion, but he said it would be in "seven figures," or millions of dollars.

Fakesh said BMG had formed a new label, BMG-Russia, and was pursuing deals with local stars — Nike Borzov and Linda were mentioned — that it hopes to record and promote across Russia and throughout Western Europe.

"We want to make our first [product] a hit," said BMG president Tomas Stein.

BMG company has already had success exporting Russian pop music with an album called "Around the World," written by two Muscovites and performed by the German band ATC.

While the world’s top three recording companies — Universal, Sony and BMG — have been represented in Moscow for years, between them they have only two Russian singers under contract.

World No. 1 Universal has Alsou, the teenage singing daughter of oil major LUKoil’s vice president, Ralif Safin.

No. 2 Sony has only the Australian-Russian alternative group B2.

BMG to date doesn’t have a single Russian artist.

BMG, which already has such popular acts as Carlos Santana, Boney M and Modern Talking, has also negotiated a deal with local CD manufacturer Russobit to produce locally 10,000 additional titles from its Western catalog of artists.

BMG has also signed partnership agreements with Videoservice, a local music video studio, and MTV, the music television channel.

Music industry officials agreed with BMG that the Russia market is worth $1 billion a year — but only when including the sales of pirated music.

The International Federation of Phonographic Industries, the body that oversees international music production, estimates the annual market for legal music production in Russia to be worth $150 million.

BMG was more interested in talking about its plans to bring Russian stars onto the world stage than fighting piracy.

BMG-Russia director Denies Komarovsky said the company’s main task "was not only to work with foreign artists, but to promote Russian [artists] internationally."

But Stein cautioned it would take some time before Russian musicians were ready to tour the top cities of Europe and America.

"We need to have a perfect product in our hands," he said.