There is no doubt that music is important to us, there is also no doubt that the same goes for the way in which we listen to it. But while our love of music hasn’t changed, the way we listen has. The internet, mobile applications, and streaming websites have all stirred a revolution in the music industry, an industry no longer the run by only production companies and distributors.
Amongst these changes probably the live streaming has been the most important. In 1999, we got Napster which introduced a new way to share, listen to, and receive music. In spite of their illegitimacy (in the beginning), music platforms enabled listeners to bypass the traditional distribution channels.
According to the marketing research company Nielsen’s report on the music industry in the US for the year 2014, they found that “streaming continued to show significant growth in 2014, with over 164 billion songs streamed on-demand through audio and video platforms, [while] physical album sales declined.”
While the MENA region doesn’t have specific data or information on this particular part of the music sector there is certainly a growing interesting amongst companies and entrepreneurs to dive in. There has also been an emergence of new mobile and web services, all contributing to industry success.
The digital music industry has brought a lot of
changes to a traditional sector and there are still a lot of
challenges facing it in the Arab region. For a broad overview of
the sector Wamda met with four key players in the Arab world: Elie
Habib, cofounder of the music streaming site
Anghami; Moustapha Bekheet, head
of Mazika, one of the
first Arabic sites that became a platform for music and celebrity
news; Tamer Ahmed, marketing manager at Trevx, a Google-like
search engine for audio files; and Sharif Muntasser, CEO
of Dozzan which sets at
fulfilling the needs of all players involved in the music
Artists now rely on the digital industry
Habib points out that more Arab artists are resorting to digital music, saying: "We launched on Anghami twenty times more exclusive songs in 2014 than in 2013, including songs by renowned artists. On New Year's Eve, more than half a million users listened to music via Anghami." Habib believes that commercial brands have jumped on the bandwagon and realized the importance of the internet and are now allocating more budgets for mobile marketing and music.
How to measure a song’s success or failure
Bekheet explains that "in the past, artists would release a cassette and say they have sold a million copies. Today, how good a song is is measured by platforms and applications." Bringing us back to the first ‘change’ on our list, artists and production companies are changing their strategies, shifting their interest toward younger generations. According to Bekheet, this "facilitates the emergence of new talents, because the cost of production is no longer as high as it used to be. It’s easier now for manufacturers to deliver their products to consumers."
Ahmed believes that the internet is for the music industry in the Arab world “like a kiss of life. Without it, many things would have disappeared, especially as it has become a means to archive and store Arab music heritage.” He added that “there are many songs that I used to listen to in old Arabic movies or by top artists. They might not receive big demand but the internet has helped to keep them anyway.”
On the other hand, he believes that the internet has contributed to creating another source of music, notably as the records and albums industry is on its way out, and sales have fallen dramatically. “The new generation doesn’t know much about “cassettes” and the internet is the channel that can get music through to the highest possible number of people possible.”
Everyone agreed that piracy is the biggest problem facing the music industry. Ahmed pointed out that it is “a big challenge because it puts a risk on production and we’re trying to find legal ways for distribution and protection of copyrights.”
Using Steve Jobs as an example, with his launch of iTunes, Ahmed said: “Jobs gathered key production companies such as Sony and Universal, and said to them: you are losing $20 billion a year because of piracy. What if I give you back $5 billion, i.e. 25% and then take 30% of it, (around $1.5 billion), would that suit you? Of course they all agreed since they were losing the money anyway.”
Bekheet said that "piracy takes content worth millions, makes cents, and everyone loses." Anghami meanwhile focuses efforts on “pirates’ piracy”. Habib said that in order to address piracy, Anghami is seeking to provide an extensive collection of music. "We will reach the 10-million-song threshold in mid-2015 and we offer a great user experience and fast music streaming with a good sound quality, in addition to free and paid services." He stressed that "piracy has become a habit among users in the region and talking about putting an end to it is pure madness. The only way to address piracy is to provide a better experience to attract more users."
Things differ from one country to another in the Arab world, but Ahmed cited the example of Egypt, where the speed of internet never allows for music downloading and streaming.
However, Muntasser believed that "the internet is much faster today than it was five years ago, and users can now listen to any type of music online." According to him, the constant problem in Egypt (20% of the population of the Middle East), is that users cannot handle the cost of streaming music on their phones. Therefore, applications like Anghami, Yalla or even YouTube, only work when the user is using wireless internet or a free internet service.
He believed that the solution is for "platforms to cooperate with communication and advertising companies in order to provide a better service." Bekheet confirmed this, stressing the fact that the problem is not in the infrastructure, but rather in the high prices of internet access.
Hesitance of artists
Ahmed believed that it is necessary to focus on expanding artists’ acceptance of e-songs, especially amongst the older generation which is still not entirely convinced that online music can be as good in terms of quality as the one they listen to on CDs; while also working on convincing new bands and artists that the internet is a great inexpensive channel and "online presence is a must because things are changing."
Lack of data
Muntasser long talked about this challenge which he considered the basis of the problem of the digital music industry because "you need the data of songs in order to classify them." He added that while Dozzan classified 110,000 songs over the past seven years, there is still a lot to do.
Muntasser is not only referring to songs’ public data, but to everything related to them. He realizes that this task requires hard work, pushing a lot of global platforms such as Echonest, Rovi, and Gracenote, even Arab platforms not to do it because it is not profitable in the short term. They instead resort to fingerprinting which allows identifying songs and gathering little public information about them. Only Pandora adopted data collection (one million songs so far). Moreover, Muntasser believed that data collection helps solve another problem, namely meeting users’ needs and preferences.
Muntasser added that everyone wants a playlist that fits their mood, or one that allows them to discover new talent and music.
He believes "this would only be possible if you have data, because the latter is the DNA of music." He added that users will not use or resort to an application again unless they find on it new songs and music that they like.
He then offered a solution, not dissimilar to Spotify, "Songs should be matched with one another so as to save the user from the trouble of searching. If a user is listening to a song, he definitely does not want to come back to the application or stop what he is doing in order to change the song or select another one."
However, according to Muntasser, the problem is that trying to match songs on most Arab platforms often gives very bad results. For example, if you are listening to a song by Nancy Ajram, there’s a high chance you might get a different style of song from George Wassouf or Ahmad Alawiyyaah after it!"
He added that "companies today focus on reaping profits, and not on collecting data, but they do not realize that they will only reap profits if users are satisfied."
Lack of artistic and technical talent
Before delving into this topic, it’s noteworthy that Bekheet considered that Arabic content is rare compared to content in other countries such as India, South Korea, or the United States. He explained that by saying, "Artists here release an album every one to three years. Abroad, singers release an album every year and shoot five music videos at least. Consequently, they have diversified content, which contributes to the supply and demand, unlike in the Arab world."
He added that another problem lies in applications: "Most developers are not academically qualified to be creative. To be honest, when I go to the Silicon Valley, I sensed a different mindset in technological development; creativity in our region is very weak and we only imitate what works abroad." He concluded by saying that accessing talent, in spite of competitions and events, is still difficult and we need to guide the ecosystem in order to develop the technical sector.”