|
Opening an online music store isn't simple, and the reason has little to do with technology.
The biggest issue preventing legal online music sites so far has been trying to convince music labels, which fear their catalogues of music could be compromised by piracy, to license their music for online distribution, according to Sean Emery, CEO of Arvato Middle East.
So far, most music labels still say no.
Even major labels are concerned about taking their music online in the region, but Abhijit Mitra, the managing director of EMI in the Middle East, says that even though his company is concerned about piracy, it will love to see an online music site in the region.
"We would welcome any company that offers legal music downloads," he says.
So when Arvato, a division of Bertelsmann, a Germany-based media group, launches the first regional online music site next month - Getmo.com, the company will be relying on one of its own joint-ventures.
"The only label we've been able to convince to go with us on trying to turn the tables on this whole industry is Sony-BMG," he says. "They have an Arabic repertoire, but they don't have enough for us to be really successful here."
Just because the company has a massive catalogue doesn't mean they can bring that music to the Middle East. A number of major artists, such as Led Zeppelin and the Beatles, keep tight reins on the distribution rights of their music. Some artists may even grant the rights to different companies in different regions, meaning that while BMG may have the rights to distribute a song in the US, another company may have the legal right to distribute it in the Middle East.
iTunes
"There are some artists that won't allow Sony-BMG to do this deal," Emery says.
Many people in the music industry think one of the main issues keeping iTunes out of the Middle East is Apple's lack of substantial distribution rights in the region. Apple has declined to comment.
However, Emery adds that the lack of an Arabic catalogue, while important, won't be critical for sales.
"We see a shift in the demand," he says. "There is more demand for international [songs]. On the beta [Getmo is in a testing phase until July 15], there is Arabic stuff, but no one is looking for it."
The site offers some mainstream pop music, including a large selection of music from Bollywood. Getting local Arabic content so far has proved difficult.
In the Middle East a number of labels have yet to grant their online distribution rights to anyone. Getmo is pursuing those rights in hopes of providing regional music on the site, but not all the labels seem to be eager to hop on board.
"There are very strong and deep-rooted companies here in the media industry that have a lot of archival footage, and a lot of experience in this market, but have never quite transcended to this new age," says Emery. "They're still sitting in this broadcast terrestrial air space."
The main fear is, of course, piracy. Smaller independent labels, which have seen the effects of piracy on the revenues of larger labels, are hesitating to put their music online. Emery adds that these companies are currently seeing revenue coming in, and aren't willing to jeopardise that revenue.
Many labels, according to him, are looking for minimum guarantees equal to their current revenue, but Emery says that Arvato is unwilling to give those minimum guarantees, since it wants them to share the risk.
"The music industry is in transition, so many of the labels are naturally sceptical to anything," Emery says. "The only thing they really like to hear is 'I want to buy your song for a dollar'."
Another issue the company faces when trying to convince local Arabic labels to make the jump online is the cost of putting the music in digital format with digital rights management (DRM) software embedded.
Emery says it costs 10 euros to digitise one track, and many labels own between 10,000 and 20,000 tracks.
Since Arvato doesn't want to cherry pick the tracks either, they are looking to license the entire catalogue.
This isn't the end of the challenges. Even bringing in Western music, which is often already in digital format, can be just as difficult but for a different set of reasons, such as inappropriate content.
"A massive part of what we've had to do is to get approval for the content in these countries," he says.
"Britney [Spears] brings out new music videos all the time, and we have to cut certain sections out of these. It's a pain for us."
|
