The digital revolution has put the Middle Eastern music industry under severe stress as the region still lacks a collection society like in other parts of the world, representatives of the sector said at a round table in Dubai Wednesday.
"The digital age has helped piracy to push the music and records industry to the edge," said Jihad Nehme, executive manager of publishing and international operations at the Middle East's largest media company Rotana.
"Before the crisis, Rotana launched 100 new records in a year, but in 2011 there were only 20 records coming from our house," Nehme added.
Nehme criticized the mentality in the region, saying that " music is for free for everybody, ignoring the intellectual property right. Music is now readily available at the touch of a button or a single mouse click."
Rotana hopes that an awareness campaign can keep people from conducting piracy activities. In order to convince end-users to pay for the songs they like, Nehme demonstrated a video clip launched by the Rotana group in which consumers are told to pay for music, "otherwise the world would be soon without music."
Craig Pereira, director of marketing and digital business development at Sony Music Middle East agreed with Nehme in principal, saying that "the environment is most challenging."
Contrary to almost all other regions in the world, there is no official collection society in Middle Eastern countries. A collection society is a licensed body of the music industry which is responsible for collective rights management.
"The absence of a collection society means that anybody can organize an event in a restaurant or hotel and play music from CDs without paying royalties to the artists or the CD brand for it," Pereira explained.
"We estimate that the region's music entertainment industry loses about 10 million U.S. dollars per year, only because there is no collection body," Pereira noted.
Nevertheless, Pereira added that the digital age also offers new opportunities for the industry. "The United Arab Emirates' largest telecom operator Etisalat, for example, has established an online music shop where consumers can download music on their laptops or smart phones for a small amount of money. The business model works and we see more of such solutions mushrooming in the region."