The music industry in MENA is bursting with potential.
Historically overlooked due to rampant music piracy, this dynamic region is now showing huge room for growth thanks to a flurry of investment activity from the major labels and streaming platforms in recent years.
This is reflected in the latest figures from the IFPI, who featured the Africa & Middle East region in its Global Music Report for the first time this year. According to the report, the market saw an 8.4% increase in recorded music revenues in 2020, with growth primarily driven by the MENA region (37.8%).
One company that has both driven the value of copyright and been at the forefront of innovation in this region is PopArabia, the Middle East’s leading music publisher.
We recently caught up with Spek, the company’s Founder and President, to discuss recent developments in the market, the potential for music rights holders, and the opportunities for taking local music global.
2021 marks PopArabia’s 10-year anniversary. What has changed in those 10 years with regards to the music industry in MENA and what are the challenges that still need to be addressed?
There are still a lot of changes in the market to come, but significant progress has been made by the entry of the major labels and the multinational streaming services in the decade since PopArabia launched in MENA. More recently we’ve also seen the entry of video platforms like Netflix; those developments along with the reality of a youthful population, social media penetration and the overall digitization of content and advertising is propelling the market forward. PopArabia really pioneered local licensing in a market that was historically unregulated. When we started it was fairly common for music to be used in advertising without any licenses in place. That’s one area that we really worked at, educating agencies about copyright and that work never really stopped, but it’s gotten much better.
In addition, streaming services delivering transparency and data now leads us to a regional A&R economy where investment in local talent makes sense. That’s a huge change. When it was a physical business there was no way to vet sales; There is no soundscan in the region, so exactly who was selling what was all very opaque. No chart system, no one sharing information publicly meant that having a holistic view of the business was just not possible. Streaming fixes a number of those issues. However, the challenge of public performance licensing has remained an issue for the industry at large. One that we are working to deliver solutions on with our partners at twofour54, the Abu Dhabi media freezone.
What role do you think technology can play in addressing some of those challenges?
Technology moves the market forward by virtue of the fact that as a physical business, most record sales in the region would have been lost to piracy. Streaming upends that and makes it possible to invest in an artist and see a return in this market; these were major hurdles in emerging markets before streaming. Since physical distribution is no longer a barrier to finding an audience, the gatekeepers have been set aside and the direct, independent path for artists in the region is really cultivating a local indie scene with promise. So, tech is important as a facilitator, but the hard work of evolving the other aspects of the business remains in order for the market to reach its full potential.
“Tech is important as a facilitator, but the hard work of evolving the other aspects of the business remains in order for the market to reach its full potential.”
How does this market differ from most Western markets? What do consumption habits and tastes look like?
It differs in many ways. For one it’s important to understand the region is a group of countries, all with their own quirks and their own legacy content industries, despite a shared language and connected cultural backdrop. Each market varies from the next. Markets like Saudi Arabia and Egypt lean more toward Arabic music, while markets like the UAE tend to be more balanced. There is a dynamic movement of new organic independent music – that bucks up against the traditional output of commercial Arabic pop music, with trap and hip hop scenes developing out of the region and finding an audience. So, like all markets it’s a mix of things, in the early stages of what I would call a renaissance for Arab content.
MENA is obviously a very diverse region. Can you talk us through some of the nuances of the music industry in the various territories?
Egypt and Saudi Arabia are the two big populous markets in the region. Egypt comes with a long history in cinema and music in the region, and despite the political instability of the market, it remains a strong source of artistic talent with a vibrant music scene. Saudi Arabia is a country seeing an upheaval of sorts, with social liberalization at the forefront of that change. Due to Saudi being the birthplace of Islam – it plays an influential role in the region, and we expect to see a lot of growth in Saudi as a market in the years to come. The UAE remains the center of much of the media activity in the region, with most of the international media companies using Dubai or Abu Dhabi as a regional hub for their operations.
Markets like Morocco are booming with regional content that exports well to France and other parts of Europe. Lebanon on the other hand is struggling under the current political and economic turmoil in the country despite being a country that has really largely defined modern Arabic music over the years. So it’s really a very diverse set of challenges and opportunities throughout the region.
What does PopArabia’s partnership with Reservoir bring to each party?
I’ve been working with Reservoir for the past 6 years and there’s a lot of trust between us having worked this long together. With Reservoir, PopArabia have a partner that understands the opportunities in MENA and emerging markets, has the resources available for us to go after deals and has a progressive vision about what a 21st century music company looks like. In PopArabia, Reservoir are now partnered with the leading publisher in MENA, a company with over a decade of history in an exciting emerging market, and the company that has really led music rights issues in the region. We are also very well placed geographically to act as a window into wider opportunities in the rest of Asia and Africa.
What are the opportunities for exporting talent from MENA to Western markets and vice versa?
I think the opportunities are good and will only get better with time. Streaming services entering new markets has taught us how consumption has changed. Local language music has become much more important in the equation, and once markets like MENA mature over the next several years, grow subscriber numbers etc., I think we will see the export of artists from emerging markets penetrating developed Western markets; it’s already happening. Similarly, we will see established Western stars looking to ingratiate themselves to foreign markets through collabs with local artists, in songs that may not necessarily be in English.
What advice would you give to music companies and rights holders wanting to do business in MENA?
It really depends on what you’re doing or hoping to achieve. The market is dynamic with a lot of movement and potential for growth that I feel confident it will realize. However, there are still many challenges, so patience is important. It’s noteworthy to remember that a country like the UAE was only formed in 1971, so even with all this growth – we are still a very young country doing many things from the ground up. The mistake I’ve seen many people make over the years is the expectation that everything does or should work the way it works wherever you’re from in the West. In my experience, the way to make an impact is not to try to force a square peg down a round hole, but rather to work with what you have locally and figure out a local solution to a local problem. That’s how markets evolve.
“The market is dynamic with a lot of movement and potential for growth that I feel confident it will realize.”
Streaming has changed the face of music consumption and pop charts are increasingly infiltrated by non-Anglo-American music. How do you see this developing over the next decade?
I think the new fabric of pop will be informed by music flying out of markets like MENA, Asia and Africa. As these local artists start to build streaming fanbases domestically, it is inevitable that we will see artists from Western markets seeking to monetize these new populations that have come online and created their own local stars. This will lead to a cross-pollination between genres and languages, ultimately redefining how we think of global pop.
Merck Mercuriadis recently said that Hipgnosis is in the middle of doing a deal with Tencent to allow them to interpolate their songs into new IPs specifically for the Chinese market. How big are the opportunities for repurposing music IP in foreign markets?
Any company acquiring catalogues or signing writers, will always be thinking of the myriad of creative ways to add value internationally for those copyrights. I think there is definitely an opportunity in interpolating Western music to new markets, however I think the bigger opportunity may be in the reverse: making local content and taking it global. It really depends on how it’s done. In simple terms, if the Chinese market overwhelmingly consumes Chinese content (which it does), then the real opportunity to gain economic value in China is in catering to the local market and local tastes. Then taking that around the world.
“I think the bigger opportunity may be in the reverse: making local content and taking it global.”
What are some of the ways that this can be done? Can you give us any examples of your own experience with this?
I’ve used this example before, but soon after I signed Indian hip hop star Divine, he began work on his album and his manager sent me the demo for a song called Mirchi. The track itself arguably is really directed at an Indian audience. A song about girls in India, lyrics in Hindi with a bunch of his homies featured. Divine was really into Stylo G (another Reservoir writer), so I arranged to link them up. Stylo jumped on the track and did his thing in Jamaican Patois – he just dug the track and it came together. What I thought was interesting about it was they created a song with no English, largely catered to local Indian audiences but nonetheless the song has traveled and continued to spread globally; 4 months in and we’re at nearly 200m streams for the video on YouTube. The trick in most cases is not being so focused on being global that you lose the local, they need to work together and it’s a fine artistic line.
WMG has just expanded in MENA – will we see a flurry of others following in its footsteps?
As music companies see revenues generating in the market and a viable path to establishing and finding executive talent, yes, I think we will see many more enter.