The illegal use of music has artists, song writers and music publishers crying foul play demanding further measures be taken to protect their work and hold offenders accountable.
Mostyn Rischmueller of The Rights Lawyers shares his professional opinion with S&S and discusses music piracy and copyright in the Middle East.
Over the past few years, much has been made of the continuing slump in music sales worldwide, particularly with regard to the impact piracy and illegal downloading has had on the music industry as a whole.
It is important to note however, that in some regions of the world such as the Middle East, rights owners continue to face parallel issues relating to the illegal use of their music.
The impact new technologies and the internet have had on physical product sales are quite apparent, hence the increased importance for rights owners to focus on alternative sources of revenue, such as the licensing of their music.
For example, record labels, music publishers, performers and songwriters alike rely heavily on organisations that enforce their rights and collect royalties on their behalf, as they have done for many years. Royalties received through the licensing of secondary uses of their music are a prime example.
There are differences between first and secondary exploitation. For example, when a performance is recorded for commercial use and then sold to consumers, this is called first exploitation or use.
When that recorded performance is then broadcast on radio, television or the internet or is played in public (in shops, hotels, airlines, bars, etc), that is called a secondary exploitation or use.
As is made clear through copyright laws, the users of music cannot make such secondary use without the permission of the owner of such rights. In return for such permission, the rights owners will require the payment of a licence fee.
Currently however, no organisation exists in the Middle East that collectively representing music rights owners for the secondary exploitation of their rights.
This essentially means that the region seemingly remains a ‘black hole’ for the illegal use of music, which extends across all manner of industries. From those who generate revenue directly from the use of music, such as radio broadcasters, to those that stream music from websites or businesses that just play music to create an atmosphere; very few people are paying to use music as they should be.
As to the reasons why this remains a problem in 2008, when most music consumers around the world have been paying royalties for the use of music for years, this can be attributed to a couple of key issues.
In the UAE, amendments to the copyright law and regulations have been made to provide for the set-up of a collecting society. The last thing remaining is the implementation of a regulatory framework for such organisations to operate within. This is currently under review by the Ministry of Economy.
The economic rights for copyright owners are clearly defined under Article 18 of UAE Copyright Law of 2002 and although protections afforded to music rights owners under UAE law are clear, in particular the right to licence collectively and subsequent penalties for unauthorised use; questions of how and when the necessary regulations are introduced to govern collective licensing, and how UAE copyright laws are to be adequately enforced, remain.
As it happens in most parts of the world where collective licensing exists, collection ‘societies’ are privately run organisations regulated (to a degree) by local government; the primary purpose being to limit the number of societies representing any one group of rights owners and to ultimately ensure transparency and legitimacy.
It is with this in mind that rights owners have a real need to continue their lobbying of the UAE government with hopes to resolve the issue as quickly as possible.
Encouragingly, more and more record companies and music publishers are seeking local representation in the UAE and throughout the Middle East.
They are aware of the difficulties that exist locally, with regard to illegal use of their music and lost royalties, but are pushing forward regardless with the direct licensing of their repertoire, without the existence and support of collective licensing bodies.
Although far from an ‘ideal’ manner in which to approach licensing, whereby music users are required to enter into individual arrangements with each copyright owner, direct (or individual) licensing appears to be the only pragmatic way forward and sends a clear message of intent.
The world’s four largest record labels have all recently made arrangements to pursue individual licensing within the GCC.
So while many music users within the region struggle to understand (or are resistant to) the concept of paying for the use of someone else’s work, it is clear that rights owners do not wish to let the issue go unanswered any longer.
Their rights are derived from and protected under the UAE Copyright Law of 2002. Under the law, they may seek action before the courts to enforce their rights.
Collective rights management
A collective rights management organisation (or a collection society) is a body created through private agreements with rights owners, operating under the laws of the territory in which they are based.
Copyright collection societies provide an essential service to rights owners, not only through generating income for their members, but also through providing a coordinated platform for lobbying government on issues of copyright reform and from which important initiatives can be launched (e.g. anti-piracy campaigns).
Rights protection in the Middle East
Considering some of the ongoing issues surrounding the unauthorised use of music within the Middle East, it is worth noting that a number of countries within the region are signatories to the World Trade Organisation's Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) as well as the Berne Convention.
In addition the UAE, Qatar, Oman and Jordan are also signatories to the World Intellectual Property Organisation’s (WIPO) Copyright Treaty, further supporting and expanding their commitment to the protection of intellectual property rights.
These agreements/treaties contain strong intellectual property requirements that nations’ laws must adhere to, relating to a large number of rights; including those of performers, producers of sound recordings, composers and authors, regardless of where they might be based.
With the relatively recent introduction of such laws, it does put into perspective the somewhat ‘embryonic’ state of copyright within the region and perhaps, the difficulties that are facing both governments and rights owners alike.
The UAE for instance, as a leader in the Middle East for the introduction of intellectual property rights, first put into effect its Copyright Law in 1993. It was only in 2002 however that the Law was repealed and replaced by the release of the UAE Federal Law no.7 of 2002 regarding Copyrights and Related Rights, which significantly updated and expanded the earlier legislation.
Copyright infringement and the future
The difficulties that face the music industry from the unauthorised reproduction of their work appear to grow unabated, not only in the Middle East, but the world over.
The growth of faster internet connections and the introduction of new technologies have made the job of fighting piracy near impossible. Physical record sales continue to drop, and although revenue received from legitimate downloads is steadily increasing, it is at a slower rate than the decline of income from the sale of physical units.
Anyone previously reliant on ‘traditional’ music sales has felt the pinch, evident in the number of CD stores closing down and staff cuts record companies and music publishers have been forced to make.
Business models have therefore had to adapt rapidly, not only to face the continuing issues relating to piracy and loss of earnings, but also to the real need to develop new lines of business/income through these previously non-existent channels.
The need for alternative sources of income away from the traditional business of selling physical recordings again becomes crucial as distribution channels and the listening and buying habits of consumers continue to change.
The issue of online licensing and the enforcement of rights online is a difficult one due to the territorial nature of copyright laws and the lack of copyright organisations in some territories of the world.
There have been a multitude of different approaches to combating music piracy, with varying degrees of effectiveness. One approach that many within the industry think makes most sense is to look at ways of generating royalties from piracy.
This has led some countries, like Finland for instance, to introduce a ‘private copying levy’, which ensures copyright owners are paid a small royalty from the sale of blank recording media, such as recordable CDs, DVDs and digital media devices.
Some countries have also taken a similarly pragmatic approach to online infringement, by seriously looking into the introduction of a tax on Internet Service Providers (ISPs), as they arguably facilitate their customers’ infringement, while also generating income from downloading habits (especially with respect to subscribers who pay for higher download limits).
To actually stop or slowdown illegal downloading, all ISPs worldwide would need to introduce filtering technology, so as to prevent their customers accessing, or downloading from, certain sites. ISPs have, and will continue to, strongly resist such moves, as they see it as adversely affecting their own subscription revenues.
As with all issues, there are strong arguments for and against either model; but it is fairly clear though that there are better ways to combat online piracy than targeting individual users.
The ‘pirating’ of physical products also continues on a large scale, particularly in some regions of the word (Asia). In this regard, the UAE has made significant efforts to battle against the sale of pirated goods over recent years and has taken important steps toward training police and customs staff to detect illegal copies. Penalties for copyright infringement in the UAE are clearly defined within the UAE Copyright Law of 2002.
As to what other measures will be taken to effectively deal with infringement and piracy within the region, time will tell.
What is quite clear though is that adequate copyright laws are, for the most part, now in place, yet there continues to be a growing need for copyright owners to have proper collective representation in the Middle East.
Mostyn Rischmueller is the licensing manager specialising in the music industry for The Rights Lawyers.
Kelly Lewis speaks with Middle East music business experts and reveals what measures are being taken within the industry to combat copyright violation and piracy.
International music publishing group Fairwood Music and Middle East production company BKP Music earlier this year launched a music publishing joint venture in the UAE, Fairwood/BKP Music (Arabia), which is seeking to enforce copyright protection in the Middle East.
The company's managing director, Hussain Yoosuf, says it will endeavour to protect and collect what is due to composers and publishers from their works being used in print, CD/ record sales, ringtones, downloads and other forms of digital media.
One of the key initiatives Fairwood/BKP Music is seeking to implement, possibly by early next year, is the establishment of one official body to enforce copyright law and collect royalties for record labels, music publishers, performers and songwriters alike.
In most countries where copyright law is enforced, at least two bodies act as representatives for the protection of these rights; performing rights bodies are responsible for administering the rights of composers, authors and music publishers, while neighbouring rights bodies are responsible for administering the rights of the performers and makers of sound recordings.
So while performing rights societies pay royalties to songwriters, composers and music publishers for the public performance of musical works on radio, television, the Internet, in concerts, and other public spaces, the performing artists and record companies are also entitled to receive royalties for the performance of their sound recordings.
Yoosuf states the society would have to be approved and mandated by the Government of Dubai, but whether that would be created as a private entity or a government subsidiary, would be determined by the government.
“We’re working in collaboration with all the major record companies in the UAE and the Government of Dubai, to try and establish a performing rights organisation so everyone is paid their dues,” he says.
“Prior to a music publisher being established in the UAE, if someone wanted to use an artist’s song in a major advertising campaign, the attitude was very much ‘I’m just going to use it and catch me if you can’, and although this is still happening in the Middle East, attitudes are starting to change as people are realising the consequences.”
This development has been fast-tracked with the help of international entertainment types emerging in the Middle East, which understand the importance of copyright law, and have subsequently brought to light copyright issues and helped to increase general awareness of the correct procedures.
“We are now seeing an increase in companies approaching us and requesting information on how they can acquire the rights to play music and that is very encouraging,” Yoosuf states.
He claims the absence of an enforcement body is impeding the entry of international music publishers in the region.
He predicts that once a performing rights society is established in the UAE it will encourage more music publishers to set-up business into the region.
Yoosuf says this will facilitate the signing and promotion of local talent, which will in turn generate new revenue streams and create infrastructure for the broader Middle East music industry.
But the success of the Middle East creative industries is dependent on a workable copyright system and illegal downloading poses great challenges for a sustainable future for music on a global scale.
To try and combat that on a local front Fairwood/BKP Music is working with ISPs to clamp down on illegal downloaders and run educational awareness campaigns to ensure people are aware that it is illegal to share copyright-protected music.
Another company that is actively working to combat piracy is Rotana.
As the world’s leading producer/distributor of Arabic music and film, the company is well aware of the economic threat piracy poses to the industry.
Rotana Digital Entertainment president Yousef Mugharbil, says Rotana’s biggest threat is the illegal downloading of music and the sale of pirated CDs.
“The violation of copyright laws destroys an entire business segment and for every $1 we make in profit, we lose $1 to piracy,” he states.
“In terms of the illegal downloading threat it’s huge because it happens globally, whereas pirate copying of CDs happens more locally, but still has a detrimental impact on the industry.”
Mugharbil says these illegal practices greatly dilute the financial earnings of the music business and cause damage to an industry that is beginning to form in this part of the world.
He says Rotana is heavily invested in fighting piracy and is working with government bodies throughout the region, film soundtrack resellers as well as ISPs and operators to bring about change, but doesn't predict seeing solid results for another few years.
“Copyright laws are evolving in the region, but are moving at a slow pace and the financial impacts we suffer as being the largest Arabic music label in the world are huge," Mugharbil states.
“We frequently encounter our music being played without people having the rights to do so. To educate people about copyright violation we're airing public service announcements on our broadcast channels daily."
Mugharbil says Rotana has received support from ISPs throughout the Middle East in tracking down offending websites and either having them shut down or their sites blocked.
Additionally, he says Rotana has been contacting pirate sites and advising them to abide by the law or suffer the consequences.
“There have been some sites that have remained reluctant to conform, so we have actively taken matters into our own hands," he informs.
“We've gone directly to their money supply informing their advertising clients that they are aligning themselves with sites that contain illegal music content and we've found this approach to be better than any law suit."
In regards to the sale of pirated CDs in stores throughout the region, Rotana is working with a number of government bodies to deal with offenders and in some cases this has lead to large retailers being shut down.
“We are committed to the industry and to fighting piracy. It's going to be a long and hard fight, but we are in it for the long haul," Mugharbil states.
General manager of Creative Kingdom Studios Mauricio Tavares agrees the music industry is facing tough times.
“It is essential to the music industry that copyright laws are enforced and a representative body formed in the UAE," he states.
“The enforcement of copyright law provides people with channels in which to go through to retrieve due revenue and unfortunately there is not the right structure in place in the UAE to do that currently."
He says a recording artist’s voice is their business and it has to be run like that, but royalties are a revenue that artists, song writers and record labels are losing here in the Middle East.
In terms of international exposure, he claims the fact that copyright laws are not being enforced in the UAE potentially could deter artists from signing deals with recording studios here, which ultimately could cost the industry greatly.
“There is a great deal of time and money that goes into making an album. When someone illegally takes your work and uses it for an advert that is money you lose. Now, because these types of revenue streams are rapidly declining, it is so important to capture every single cent,” claims Tavares.
He believes in order for the local music industry to be successful it must align itself with international markets and protect the interests of the broader industry.
Tavares says the issue is also about acknowledging that the music industry in the UAE is still in its infancy in comparison to other countries and putting these types of measures in place will foster the future growth and protection of local artists.
“Once a representative body is in place here it will ensure people pay for the right to use music content, which will see the income filtered back into the local market. Additionally it will allow people to manage where they want their music to be broadcast on a local and global scale,” Tavares claims.
Tavares says the illegal download generation is a big problem for everyone globally.
“For every person that illegally downloads music it costs the industry greatly because it goes further than that one person – they pass it on to friends, who then pass it on again and again,” he claims.
“You can’t measure the financial cost of piracy by the amount of downloads there are because for every one download you can easily multiply that by five, so determining the actual cost is hard because the figures are higher than what’s officially recorded.”
He says piracy robs the industry and the impact is widely felt – he suggests global CD sales are at least half of what they were five years ago if not less.
“There is only so much we can do to push this point, but what it comes down to is that people need to become more loyal and support the industry because they have an ethical obligation to do so,” Tavares states.
“People who abuse copyright, buy pirate copy CDs and illegally download music are rendering a bleak future for the music industry as a whole.”