Middle East’s ESMAA points the way for music rights in emerging markets
Photo: Darcey Beau
The importance of emerging markets for the next growth story in the music industry is resulting in labels and streaming services prioritising growth in these territories. In addition to resolving the industries growth problem, these new markets are going to change the superstar business. Emerging markets are adding new ideas and sounds to an increasingly saturated music industry that has been long dominated by the West. It is an exciting time for music culture across the globe, as it is poised to enter the most culturally diverse era the business has ever seen. However, for all of the market development, music rights sometimes trail behind. News of the Middle East embracing its first ever CISAC approved music rights entity (ESMAA) is an important illustration of when and how music rights can catch up with fast growing music markets in emerging territories.
How international and local entities can develop an emerging music market together
The UAE represents a useful case study for the way in which this change is taking place. Historically, setting up a business in the UAE required a majority-holding local partner. After recognising the discouraged foreign investment, the government soon allowed industry-specific free-zones to crop up across the UAE. PopArabia launched as a portfolio investment of the Abu Dhabi media zone, twofour54, in 2011. In 2020, Reservoir Media entered into a joint venture with PopArabia to invest in the development of Arabic talent from the region. As a result of a local player facilitating new business models in the region, and support from an international music company that is utilising its platform to highlight new talent in the area, PopArabia established itself as a leading player in the region. In addition, with international ties, the company sub-published some of the world’s leading music catalogues, including Sony Music Publishing, BMG Rights, Kobalt Music Publishing, Songtrust, Concord Music Publishing, etc.
Music licensing in emerging markets
Music licensing and royalty collection are two of the most common problems across emerging markets. The Middle East, for a very long time, had major publishers collecting from the region, but never had a CISAC approved body to manage global rights thus ensuring legal music usage across the board.
With streaming services, both local (e.g., Anghami) and international (e.g., Deezer), quickly influencing music listener habits, the Middle Eastern market led by the UAE, Saudi Arabia and Lebanon is developing a new, strong music culture. New music consumption habits bring new companies and brands by using music to better connect with their consumer base. As the music market in the Middle East grows, it is important to ensure that rights holders and creators are properly compensated for the use of their catalogues.
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ESMAA – solving the licensing problem step-by-step
Contrary to some assumptions, music rights are protected under federal copyright law throughout the Gulf region. Any infringement of these laws allows rights holders to pursue litigation, but the reality is that the complexity and expensiveness of the legal system acts as a deterrent for copyright holders to enforce their rights.
Adding to the complex legal rights system for emerging territories where full understanding and recognition of music rights can sometimes be below where it should be, “divide and control” is the easiest way for music users to not pay.
With a massive market share of global catalogue in the region and an ongoing process of nurturing local talent, PopArabia was well positioned to create a regulated body for the region. ESMAA recently concluded landmark agreements to represent the UK’s PRS for Music and Canada’s SOCAN repertoire, ultimately leading to a Rights Management Entity (RME) Client status at CISAC – a historic development for the first rights organisation in the Gulf.
With ESMAA, the Middle East has a larger potential to engage with the global music community and to unlock value for local and international music creators in the UAE and the Gulf area for the first time in the history of the region. This is a necessary first step for a growing music market. ESMAA can also enable new markets to understand the value of simplifying music licenses for users that encourage them to clear their license requirements. In addition, this new model can set precedence on how the entire global music industry can join hands with local players and experts to unlock great value and embrace new cultures in the music industry.