Coming for YouTube

Hello! This week our top story is about the legal troubles facing two major YouTube bloggers — the widely popular Yuri Dud and formerly influential Yuri Khovansky. We also look at how IT giant Yandex is looking to break into the online grocery store business, and why Russian intelligence officers reportedly attempted to poison one of the country’s leading poets and literary critics.

Russian YouTube stars hit with legal troubles

After pressuring independent media and supporters of opposition leader Aleksei Navalny, the Russian authorities appear to be turning their fire on social media influencers. In the space of a few days last week, Russia’s most popular YouTube star, Yuri Dud, was charged with promoting drug use, while blogger and comedian Yuri Khovansky was arrested for ‘justifying terrorism’.

• Khovansky reached the peak of his YouTube popularity a few years ago, but he still has 4.4 million subscribers and his most popular clip — a 2016 rap-battle with rival streamer Dmitry Larin — has more than 40 million views.
• Khovansky’s arrest Tuesday took place with a heavy dose of theatrics. Police came to the blogger’s apartment, pinned him to the floor, and interrogated him for the benefit of the accompanying cameras. The resulting clip got heavy airplay on pro-Kremlin social media, and the following day the Investigative Committee published a video in which Khovansky publicly apologised for his actions — a law enforcement tactic that is commonplace in the North Caucasus republic of Chechnya. It all seemed like a farce, until a court ordered Thursday that Khovansky be detained for two months.
• The charges against Khovansky relate to a spoof song about a terror attack that unfolded at Moscow’s Dubrovka Theater in 2002 and killed 244 people. Khovanksy’s song was made several years ago and, like all of his work, is clearly not intended to be taken seriously. The song has never been publicly performed, but another blogger uploaded fragments of a rendition earlier this year. If found guilty, Khovansky could face up to seven years in jail.

• Russian YouTube star Yuri Dud also fell foul of the law last week. Unlike Khovansky, Dud is still wildly popular and considered one of Russia’s best interviewers. On his YouTube channel, Dud releases in-depth conversations with anyone from stand-up comedians to exiled billionaire Mikhail Khodorkovsky and Navalny. He has over 9 million subscribers and his videos regularly get over 10 million views. According to polling firm Romir, Dud is Russia’s most trusted blogger. He openly supports the opposition, and regularly appears at protest rallies.
• Dud now faces a charge of ‘promoting narcotics’, which could result in a fine of up to 1.5 million rubles ($20,800). The case became public Thursday and relates to an interview Dud did with rapper MORGENSHTERN last year and blogger Ivangai in March. Both videos garnered more than 20 million views on YouTube and included discussion of drug use. It’s difficult to see where the ‘promotion’ took place, however, as both interviews were accompanied from the outset with a caption reading ‘Drugs are evil. Don’t use them!’.
• The case against Dud was initiated by Yekaterina Mizulina, a member of the Public Chamber and daughter of conservative lawmaker Yelena Mizulina who drafted Russia’s notorious legislation that banned ‘homosexual propaganda’. Mizulina Jr said she hopes in the future to be able to bring a criminal case against Dud. This would likely be for inducing others to use drugs and would carry a maximum sentence of up to 15 years in prison.

Why the world should care

It could be that two cases in a week against prominent YouTubers is just a coincidence. But the Kremlin has been worrying for years about the influence of bloggers on young people. And RT editor-in-chief Margarita Simonyan, a leading advocate of restrictions on YouTube thinks differently. “For some time, the system felt YouTube was out of reach, and that laying a finger on its stars was not without risk – as if the millions of followers that watched these unknown freaks would take to the streets. Guess what changed the system’s mind? That’s right. When they arrested YouTube’s biggest star [Aleksei Navalny] and absolutely nothing happened,” Simonyan wrote on her Telegram channel.

Russia’s Amazon? Yandex in talks to acquire major grocery store chain

The ‘Russian Google’ might be turning into the ‘Russian Amazon’. Last week it emerged that IT giant Yandex was in talks to buy premium grocery store chain Azbuka Vkusa, which is a symbol of affluent Moscow living. It was The Bell that first reported Yandex’s flirtation with offline retail, a move that market insiders compared to Amazon’s 2017 purchase of grocery store chain Whole Foods.

• There is some truth to comparisons between Yandex and Google. Since Yandex was founded in 1997, it has earned the bulk of its money from search engine advertising. However, for several years it has been actively investing in other areas – particularly food tech and e-commerce. For the first time, advertising revenue made up less than half of Yandex’s income this year.
• Retail is Yandex’s focus at the moment, prompting comparisons with Amazon. Recently, Yandex announced it wanted to become one of Russia’s top three retailers.
• Azbuka Vkusa is a premium grocery store based in Moscow and the surrounding region. Its products are expensive and an Azbuka Vkusa platinum card is something of a status symbol for Muscovites. The company prides itself on being a seller of ‘European’ products, but a 2014 embargo on food imports from the West and falling salaries halted previously rapid growth. Now, analysts value Azbuka Vkusa at $300 million (excluding debt).
• So why does Yandex need a high-end grocery store chain? For two years, the company has been experimenting with the delivery of groceries and ready-to-eat food. Its Yandex.Lavka service is already very popular in Moscow (in the last three months of 2020 it generated about $55 million in revenue) and is actively looking to expand in other big cities. Yandex also wants to export the Yandex.Lavka concept abroad, with similar services slated to open in London and Paris.
• There are obvious synergies between Azbuka Vkusa and Yandex.Lavka. Both companies work in the premium market, and Azbuka Vkusa is historically strong in the prepared food market (that Yandex.Lavka is actively targeting). In addition, a merger could reduce purchasing costs for Yandex.Lavka as it takes advantage of economies of scale.
• “Yandex is trying to determine its place in the market: search engines and taxis are established businesses, but the rest has an experimental feel. That includes the grocery segment, in which it is impossible to succeed without detailed knowledge of the sector,” said Alexei Krivoshapko, a retail analyst at Prosperity Capital Management. “After getting a foot in the door with Lavka, now Yandex is putting its shoulder in with the purchase of a niche premium player.”
• However, Azbuka Vkusa and Yandex share something beyond an interest in the premium market: they have a shareholder in common. Last year, billionaire Roman Abramovich’s asset management company Millhouse Capital acquired a minority stake in Yandex. Abramovich and his partners also own more than 40 percent of Azbuka Vkusa.

Why the world should care

The rapid delivery of food and groceries (within 15-20 minutes of ordering) is the next big goal for the e-commerce sector. Yandex has been one of the first major companies to engage with this fast delivery revolution, but there is still a long way to go to make it a reality in Russia.

FSB poison squad reportedly targeted prominent poet

Investigative outlet Bellingcat published a long article Wednesday about previously unknown activities of a group of Russian intelligence officers who poisoned Navalny last year. This time, their target was not a politician but poet Dmitry Bykov, who is well-known for criticizing the authorities. The most surprising thing was not the attempted poisoning (sadly, that’s no longer a surprise to anyone) but the choice of victim.

• On a 2019 trip to the Siberian cities of Novosibirsk, Yekaterinburg and Ufa, Bykov was accompanied by the same team of officers from the Federal Security Service (FSB) that took part in the poisoning of Navalny, according to the Bellingcat investigation. This ‘poison squad’ is from the second directorate of the FSB (responsible for combating terrorism) and the FSB’s Institute of Forensic Science. Several of them had accompanied Bykov on earlier trips.
• The reason for the trip (on which Bykov was accompanied by his wife) was to take part in a ‘Total Dictation’ event. This is a popular activity among Russian speakers — and it sees participants test their literacy by taking down dictations from prominent writers and public figures (Russia remains a very text-centric society). Before his flight to Siberia, Bykov appeared on radio station Ekho Moskvy and talked about why Russians don’t make jokes about Putin (“Because today the authorities are viewed as something alien, otherworldly,” Bykov said).
• After accompanying Bykov and his wife for a few days, the poisoners flew back to Moscow. Bykov first showed signs of illness on April 16, 2019, as he flew from Yekaterinburg (his stop after Novosibirsk) to Ufa. According to Bellingcat, Bykov ate nothing at the airport, but did change his clothes before the flight. Bykov developed symptoms similar to Navalny’s in a similar time frame – roughly 2.5 hours after contact with the allegedly poisoned clothing – but in a milder form. He was hospitalized in Ufa, fell into a coma and required a ventilator.
• Bykov’s friends rallied around and organized an evacuation flight. But the plane was almost turned back “on the orders of the Health Ministry”, reported Bellingcat. Only a flurry of urgent calls from well-wishers managed to overcome the bureaucratic resistance and, on April 18, Bykov was finally transferred to a Moscow hospital. He regained consciousness three days later.
• After the Bellingcat investigation was published, Bykov said it was like “winning a state prize”. He added: “It’s nice to see that my modest activity is worth such lavish expense. Think how many tickets they bought. Although, I’d rather have the money.”
• The fact that the poisoners were reportedly tracking Bykov for more than a year is bewildering, and not just to Bykov himself. Opposition leaders also asked the same question. Bykov does not hide his political opinions — he spoke at opposition rallies in 2011-12, condemned the annexation of Crimea and supported last year’s protests in Belarus — but he is first and foremost a poet and literary critic. There is no opposition group that could reasonably be seen as ‘followers’ of Bykov, and nobody is aware that he has any political ambition.
• Bykov is perhaps best known for his Citizen Poet project, on which he worked with the actor Mikhail Yefremov (who is currently in jail after a drunk-driving accident left another motorist dead). Bykov wrote the caustic verses of protest for Citizen Poet and Yefremov would recite them.

Why the world should care

What happened to Bykov once again proves that it is impossible to second guess the logic of Russia’s security services. If someone is trying to convince you differently, it’s worth questioning how well this person really understands what’s happening in Russia today.