The Rise Of Music Streaming In The Middle East

May 22,2018

A few weeks ago social media was abuzz when digital music juggernaut Spotify began advertising for jobs in Dubai. The move was widely embraced by music fans around the UAE and understandably so, Spotify boasts the largest library of songs and it is by far the most dominant player in the music streaming industry. But what does this mean for musicians and fans in the MENA region?


How big is Spotify?

The company’s recent IPO valued it at just under $30 billion. That’s right, thirty times larger than homegrown unicorns like Careem and Souq. Spotify serves 175 million users, and employees over 3000 individuals. That’s a number far greater than its nearest rivals.


Spotify has never turned a profit

According to fillings with the SEC, last year the company posted an operating loss of $461 million on revenue of nearly $5 billion. Its gross margin continues to widen and shows no signs of correction. International Artists aren't seeing much money from streaming either and this is well documented through legal battles with musicians from around the world these include names like Tylor Swift, Thom Yorke and others.


Lack of transparency

Why are so many artists either suing or complaining against digital music streaming? Is it possibly because this segment is new and legal terms are not known to everyone?

But it isn’t just the lack to transperancy towards artist revenue - A recent report by Norwegian Newspaper Dagens Naeringsliv alleges that TIDAL deliberately inflated streaming numbers for Beyonce’s album Lemonade and Kanye Wests The Life of Pablo. The Life of Pablo hit 250 million in 10 days and Lemonade reached 306 million in 15 days —huge figures for a streaming service with only 3 million subscribers at the time. For these figures to be true it would mean that every user on their service listened to Lemonade over 105 times in 15 days. We love Beyonce – but come on.


Streaming in the MENA

Digital music streaming in the region is in its infancy and has experienced almost none of the problems US and Europe have faced. Anghami is the market leader and a huge success story. The company now features a large selection of both English and Arabic catalogues and boasts over 40 miilion users in the MENA region. It also reported a revenue of $10 million for 2016. However the MENA region is still plagued with problems such as poor internet connection and introducing consumers to paid subscription models for music.


Musicians, musicians, musicians

Lets face it, at the end of the day musicians keep the whole business ticking but it seems they are the ones making the least amount of money. In the MENA where the music culture is still maturing - increased competition from streaming services and more initiatives to develop local talent could assist these artists and help them earn a decent living. In the UAE Fashion retailer, Centrepoint, recently partnered with Anghami, for a musician performance platform titled “Anghami Sessions”. The collaboration aims to nurture musical talent in the region and will feature eight sessions. Similarly, we are steadily seeing more initiatives that support local talent.


Bring it On, Its good for business

History has taught us that competition is always good. It only aids the development of the industry and is good for both for consumers and artists alike since it helps create more opportunities and cultivate a culture for local talent to flourish. Let's just hope we learn from the mistakes in the west and build a system that's rewarding, mutually beneficial and transparent.