Artists sing sad tune on music copyright

Performers losing millions of dollars as users fail to pay for their product because UAE lacks nationwide system to collect royalties

Record companies and artists are losing millions of dollars in the region every year because local broadcasters do not pay for the music they use on air, prompting renewed calls for the UAE Government to approve a nationwide system for collecting royalties. The vast majority of organisations that broadcast copyrighted material - including radio and TV stations, and also public venues such as hotels and retail outlets - are in breach of copyright law, say industry executives.

And while some individual companies have taken steps to pay royalties, broadcasters say that such payments can be made only when the Ministry of Economy approves a so-called rights collection society. Hussain Spek Yoosuf, the managing director of Fairwood Music Arabia, which represents the publishing rights of Universal Music Publishing and EMI Music Publishing in the UAE, says rights owners are losing "tens of millions" in the MENA region. By comparison, music royalty collections in the UK amounted to £623 million (Dh3.28 billion) last year.

"In aggregate - over TV, radio, retail outlets and hotels - the [losses] amount to millions of dollars per year in the UAE. It's tens of millions in the wider region," said Mr Yoosuf. Mark Hill, the managing partner at The Rights Lawyers, a Dubai-based law firm specialising in media and intellectual property, said the "vast majority" of UAE broadcasters "are using copyrighted material without the permission of the rights owners".

"If you were operating a radio or TV station anywhere else in the world, you'd have to pay these fees," said Mr Hill, whose practice represents the intellectual property interests of EMI Music Arabia, Warner Music, Sony-BMG Entertainment and Universal Music in the Gulf. Under the UAE's copyright law of 2002, copyright infringement is punishable by a minimum fine of Dh10,000 (US$2,720) and two months in prison. However, this law has not been enforced for breaches of copyright by TV and radio stations.

The Ministry of Economy is considering the approval of a royalties collection, or collective administration, system, which must receive special government permission because it is deemed a "restricted" business. "At a federal regulatory level, we're still waiting. We need the last nod from the Ministry [of Economy]," Mr Hill said. Mr Yoosuf said there were "positive signs" the government could approve the formation of such a system, adding that the ministry's proposal to set up a copyright management centre to protect the interests of book publishers was a step in the right direction.

"It's a different issue, but a cousin of what we're trying to do," he said. The Ministry of Economy could not be reached for comment. Other industry executives said the lack of regulation on royalty payments was hurting artists. "Across the Arab world, the copyright protection for creative productions is not enforced. The biggest case in point is the legacy of big stars such as Fairuz, Umm Kulthum and Abdel Halim Hafez. The whole Arab pop culture has been built around them, but the remuneration is not there," said Ali Jaber, the dean of the Mohammed Bin Rashid School of Communications at the American University of Dubai, and a consultant to the TV and publishing group Dubai Media Incorporated.

"The music industry has limited growth due to the lack of regulation," said Mr Jaber, adding that the situation in the UAE was better than in many other parts of the Arab world. Some UAE broadcasters have individual agreements with copyright holders, through which they pay royalty fees. Emarat FM, which is part of the Abu Dhabi Media Company (ADMC), the owner and publisher of The National, has had a deal in place with Rotana, the world's largest producer of Arabic music, for some years.

ADMC is also in the process of signing a deal for the rights to play Rotana-owned music on its Star FM station, said Abdulrahman Awadh, the director of ADMC's Abu Dhabi Radio Network. "We are ready to pay anyone; we want to pay royalties for every song we play," said Mr Awadh. Other broadcasters say it is impossible to make royalty payments because there is no collection system in place. "The region is still evolving. It's advanced, but there is still room for improvement in terms of royalties and regulation. Royalties are part of our agenda … But I really don't think the market is ready, in terms of its maturity," said Mohammed Almulla, the chief executive of the Arab Media Group, which operates seven radio stations from its Dubai base.

The Arab Media Group does "not [pay] direct royalty payments", but has other agreements in place with record companies, Mr Almulla said. "There is a law about [use of copyrighted material] … But the collection mechanism has not been put in place. So we work with record companies hand in hand. We need each other for cross-promotion. It's a business relationship that works for the moment, but that may change in the future," said Mr Almulla.

Russell Woolford, the general counsel for Arvato Mobile, which provides a range a digital entertainment content and manages royalty payments, said the lack of a collection system did not necessarily mean that all local broadcasters were in breach of the law. "While it may be the case that some or all of the radio stations do not pay royalties for the music they play, often because there is no collection society yet established here, one cannot assume that radio stations are breaking the copyright law, as they may have the consent of the copyright owners. This could be through a licence obtained here or in another territory, as many of the commercial stations have parent companies around the world," said Mr Woolford.