20 Nov 2014

Is UAE Missing the Beat?

Authored by: Maha Bin Hendi

Is UAE Missing the Beat

The Oath magazine recently published an article by Maha Bin Hendi, Associate in our Commercial team on the challenges music artists and performers face in the absence of regulatory bodies to protect and distribute their royalty.
 
There is little doubt that once a music artist “makes it” in the entertainment industry, he or she has huge earning potential. Album sales, concerts and endorsements generate millions. Since the tragic death of superstar Michael Jackson, his legacy has lived on and his estate has earned tens of millions since his death. This is made possible through royalties. However, these kind of earnings are not likely to be generated from the UAE.
 
Music publishing giants are hungry to empower a collection society in the UAE. Prominent Arab artists like Ahlam, Nancy Ajram and Amr Diab are missing out on millions of dollars in royalty payments each year due to the region’s lack of royalty collection societies.
 
Pros and copyright infringement laws

 
In Canada and the US, collecting societies are called performance rights organizations (PROs). The ultimate aim of such PROs is to keep track of every single performance or broadcast of works protected under copyright, following which they collect and distribute royalty payments to writers, music publishers and artists.
 
For example, the American Society of Composers, Authors and Publishers (ASCAP) provide a robust payment system to users of copyrighted music such as radio, shopping malls, bars, clubs and TV stations. According to the ASCAP, USD 5 billion in royalty payments was distributed to its members in the last six years.
 
However, such collection societies do not exist in the UAE, which leads to various broadcasters breaching Federal Law No. 7 of 2002 in respect of Author Copyrights and Parallel Rights (”UAE Copyright Law”). Punishment and penalties are imposed on copyright infringers who use audio and visual recordings for commercial gain without an appropriate license from authors or parallel right holders, under the UAE Copyright Law. Presenting the work of art/performance to the public via communication networks or any other media without authority is prohibited as it flouts the spirit and letter of the UAE Copyright Law.
 
No infrastructure for implementing the law
 
Many radio and TV stations, malls, hotels and restaurants in the UAE do not hold appropriate authority to play music and are inadvertently breaching the law, consciously or unintentionally. Public Performance Rights in the music industry in the country are viewed as a grey area whereby businesses are unsure of the legal requirements of playing music in public areas. Even if they are sure of the legal repercussions, they flout the law because of the lack of consequences. Despite of the UAE Copyright Law contemplating collection societies and providing for significant criminal sanctions for breaching the law, there is a lack of infrastructure to enforce the law and to make collections for the music to be played in a public space. Consequently, people have simply continued to do it unabated and a culture of optional compliance has crept in.
 
Should royalties be optional?
 
The answer depends on which side you stand. People who flout the law will say the current system is perfect, whereas artists and music rights holders will say compulsory payment of royalties has to be enforced.
 
The UAE market has seen a considerable increase in pressure from the music industry and people are more sensitive about intellectual property rights and its usage. However, that pressure has not brought us any closer to collection societies, and whilst no legal consequences are enforced, the situation isn’t likely to change either. The consequential detriment to the local music industry is hard to gauge. However, the lack of awareness or enforcement of intellectual property rights associated with music can lead to undervaluation of musical works and is likely to be an obstacle to the Middle East developing a mature music industry.
 
It is vital to introduce infrastructure in the UAE to support the intent of the UAE Copyright Law so as to enable collection of royalties in line with international standards. Moreover, the establishment of collection societies is critical for connecting music rights holders with end users and regulating music rights in the UAE. We are probably a long way from artists refusing to perform here because of the lack of collection societies, however, it is not beyond the realms of possibility that such a stand would fast track collection societies. Even if just a portion of the potential money was pumped back into the industry here, it might generate a whole host of home grown talent as well.

 

This article, including any advice, commentary or recommendation herein, is provided on a complimentary basis without consideration of any specific objectives, circumstances or facts. It reflects the views of the writer which may, in some cases, differ from those of the firm, especially in the develop jurisdiction of the UAE