As a result of the credit-card shutdown, Spotify is no longer running advertising in Russia, a source at a streaming platform tells. The news follows decisions by Netflix and TikTok over the weekend to pull back from Russia amid an anti-fake news crackdown by streaming platforms. Last week YouTube and TikTok banned content from Russian state-sponsored news outlets RT and Sputnik, with Spotify soon following suit.
Meanwhile, the major record labels — Universal Music Group Group, Sony Music Entertainment and Warner Music Group — were dealing with cratering sales in Russia and logistical challenges brought on by sanctions that are making it challenging to pay artists and employees there. The companies are supporting employees in Russia while assisting humanitarian air efforts for Ukrainian refugees who are fleeing the escalating military conflict.
The moves come as credit card providers effectively canceled Russia. Visa said in a statement that it would “work with its clients and partners within Russia to cease all Visa transactions over the coming days.” Mastercard and American Express also said they would suspend all operations in Russia. PayPal also said Saturday that it had shut down services in Russia but that it would support withdrawals “for a period of time.
With Western sanctions putting the Russian banking system on ice, the labels are worried about how they will pay their artists and employees. “There isn’t a precedent for this,” says one label executive. “We’ve never been in a situation where a country has effectively switched from South Korea to North Korea — an open economy to a closed one — overnight.
And in an internal memo sent to Warner Music employees on Friday, the company said it was matching contributions to the International Committee of the Red Cross through the end of March and was also making donations to Polish Humanitarian Action and Project Hope, which are “both supplying refugees with medical provisions, food and other basic items, while protecting the safety and dignity of displaced people.