Harmonising music rights in the Middle East

Words come effortlessly to Hussain Yoosuf, the managing director of Fairwood/BKP Music in Dubai. As a teenager, he used his MC skills to help make the Dream Warriors the best-selling hip-hop group in Canada.
These days, "Spek" - the stage name his colleagues still use for him - is more likely to be seen talking into an iPhone than a microphone, but the persuasive power of his words remains undiminished.
At 33, he has become a consummate dealmaker. His latest deal has major implications for the music, advertising and film industries in the Middle East. Last month, Fairwood/BKP announced a sub-publishing agreement with Universal Music Publishing Group (UMPG), one of the world's largest music publishers, that will allow a major international music publisher to collect songwriting royalties and promote its artists on the ground in the region for the first time. In the process, the deal put Fairwood/BKP - a joint venture formed in January between BKP, the audio production company, and Fairwood Music, the independent UK music publisher representing such artists as David Bowie, Bob Marley and U2 - squarely on the global music publishing map.
"There's never been an active music publisher here," said Mr Yoosuf. "The concept of a royalty has never really existed here. We were the first ones that have really set up shop here with the sole intention of being a music publisher - of representing the rights of music creators, composers and authors."
Music publishers play one of the most misunderstood roles in the music industry, perhaps because their title refers to an activity that few of them do anymore - publish sheet music. Instead, most primarily deal with the marketing and commercial exploitation of songs and music catalogues. They seek to connect songwriters with recording artists to record them, promote the use of those songs in advertisements and films and supervise the collection of royalties from these uses. Traditionally, these royalties are split down the middle, with half going to the publisher for their services and the other half going to the songwriter.
Music publishing rights range from mechanical royalties, which refer to payments for the reproduction of songs in a recorded medium, to synchronisation licences, required when a song is used with a visual image.
Although BKP is registered in Dubai Media City, its shop is temporarily set up in a Jumeirah villa, decked out like an operation with global music industry aspirations. There's an enormous pop art-style print of John and Yoko embracing in the lobby, a leopard-print sofa in the waiting room and a jaw-dropping vintage gold-glitter electric guitar in the corner of Mr Yoosuf's orange office.
The only element missing from this picture, he and others argue, has been a functioning music industry infrastructure to ensure that the John Lennons of today and tomorrow get their fair share of royalties.
"The way it's worked historically in Asia - not just the Middle East, but throughout India, China and throughout Asia in general - is that somebody would write a song, and then somebody else would just buy it out," said Mr Yoosuf. "According to the law, for every record sold, a royalty has to go to the publisher, who then passes it on to the composers. And that just hasn't happened here."
That law has its foundation in the Berne Convention for the Protection of Literary and Artistic Works, an international copyright agreement developed at the instigation of Victor Hugo in 1886. It states that whenever a song is used in a public forum, the user must pay a fee to the creators of the song, which includes both the composers and the performers.
The UAE Copyright Act includes these principles. However, royalties are rarely paid in the UAE because it lacks the enforcement agent of a performing rights organisation, the body that in most countries acts as the conduit between the record labels and the music publishers.
"It's been kind of a free-for-all, really," Mr Yoosuf said.
But there have been signs that the free-for-all is coming to an end. Performing rights organisations have popped up in the past few years in China and India, and according to Mr Yoosuf there are "discussions going on right now at a government level on launching a UAE performing rights organisation".
Eric Baptiste, the director general of the Paris-based International Confederation of Societies of Authors and Composers (Cisac), has been keeping an eye on the negotiations. His organisation is eager to support the creation of a performing rights society in a region where it has historically had shallow market penetration. Although it has members in 118 countries, "we only have a few in the Middle East", Mr Baptiste said. "We have one in Egypt, and an agent of a French one in Lebanon, and another in Israel. That's it. Nothing between Jordan and Pakistan."
Mr Yoosuf points to the UAE's largely successful battle against software piracy - and the subsequent arrival of technology firms such as Microsoft, IBM, Oracle and Sun Microsystems in Dubai Internet City - as evidence of intellectual property protection.
A recent Business Software Association study named the UAE as the only Arab country to have made significant inroads into the reduction of software piracy.
"There's probably not a country in this part of the world that is better poised to set up a proper infrastructure for the protection of intellectual property and copyrights," said Mr Yoosuf. "That's why I think it's the most exciting market for music rights in the world."
But there are significant obstacles to the enforcement of music copyright.
Omar Obeidat, a partner at the intellectual property and information technology division of Al Tamimi and Company in Dubai, was involved in many cases against software pirates in the early part of this decade. Today, he continues to receive frequent requests to enforce software copyright, but has never been asked to enforce one for music.
"It's related to the rights holders," he said. "There's no rights society established in the UAE that protects owners' rights, [and] which would facilitate the collection of royalties and enforcement action."
At the moment, the other major labels in the UAE - including EMI through its licensee EMI Arabia, Universal and Warner Brothers through Music Master and Sony BMG through Megastar - pay the publishing royalties to their music in Europe, where most of the music is shipped from. But this arrangement is inconvenient for those who want quick approvals to use songs for commercials or films.
Raj Kumar, the creative services manager for the Dubai offices of the Grey Worldwide advertising agency, said calling London every time he needed approval to use a song in a commercial would be "very difficult". He prefers to call BKP to get the rights cleared for him. The process is sped up even more when BKP sends over CDs filled with music specially selected for the tastes of Grey's clients. Although Mr Kumar said most of the television and radio work that his company did for clients - from toothpaste brands to local malls - used the less expensive, more anonymous "classic" music in the background, there had been a clear trend in the industry over the seven years he had worked there: "The client has started spending so much money."
Statistics support his observation. According to the Pan Arab Research Centre, a marketing research firm, advertising spending in the UAE jumped 43 per cent to Dh1.6 billion (US$441 million) in the first quarter of this year compared with the same period last year.
An increasingly cluttered ad landscape means advertisers must go to greater lengths to distinguish themselves, sometimes springing for chart-topping songs.
In the past year, Mr Yoosuf said BKP had cleared songs by artists such as Fat Boy Slim and Gnarls Barkley for local television advertisement campaigns. "Advertisers in the UAE and the Middle East are starting to use famous music for their campaigns," he said.
In an industry struggling with the repercussions of downloading, music publishing has increasingly been where the money is. Last year, UMPG became one of the last majors when it purchased Bertelsmann's BMG Music Publishing for $2.2bn, the highest price ever paid for a music publisher. That same year, US music publishing revenue came in at more than $4bn.
The Middle East lacks consistent figures for either recorded or published music.
It was a combined sense of the UAE's growing potential as a music publishing market and the region's increasing awareness of copyright law that drew UMPG to establish its first Middle East foothold, said Andrew Jenkins, the vice president of international for UMPG. "Generally, in some countries of the Middle East, there seems to be more interest in music, intellectual property and paying for rights in a way that perhaps was not so important in the past," Mr Jenkins said. In addition, "we found someone who we felt we could deal with", he said, calling Mr Yoosuf "an unusual individual who saw a way forward in the market".
The company found a similar person in India three years ago, he said, which led UMPG to enter that market for the first time. When it got there, although there was a performing rights organisation, no one was collecting royalty payments from music labels.
Today, the publisher receives payment from two record companies for royalties, and there is a stronger performing rights organisation.
The second stage in the company's India strategy was to sign local talent, he said, a dream he hoped to make a reality in the UAE as well. "The first stage is to establish a property industry and set up a performing rights society. And the next step is to look at finding local people who are able to sign local talent that we feel can work with us locally and internationally."
That is music to the ears of artists such as Hannah Evans, a guitarist for the local band Indiephone, one of Dubai's more popular local bands. She sighs with frustration when describing the state of the country's music scene. "It's like a vacuum, because we've got the talent and we have the producers who can produce great albums, but despite all the capable people, it seems like there isn't that thing linking the bands to the distribution," she said. "You know, at the end of the day, what you've achieved in the UAE is big, but it doesn't have an effect on the outside world."
But the rest of the world is starting to pay attention to the Gulf's music publishing potential. On the heels of the UMPG deal, Sony/ATV Music Publishing, the joint venture between Sony and trusts set up by Michael Jackson, signed a deal giving Rotana Audiovisual, the Saudi-based media powerhouse, the right to license and collect for them throughout the Middle East. Mr Jenkins said his company had also talked to Rotana, but ultimately thought the deal they made with BKP would better help bolster a sustainable music publishing industry in the region.
This is the vision that inspires Mr Yoosuf. "The trickle-down effects are huge," he said. "All of a sudden, you have this amazing grass roots industry, which is like a spiderweb. That's what a real organic birth of a music industry would be like, and I think we're seeing the beginning of that."
khagey@thenational.ae