Rotana loses $5m a year in royalties

Rotana finds itself losing as much as US$5 million a year for a lack of system to collect royalty payments from UAE broadcasters.

The non-collection of performance rights fees deprives artists such as the Lebanese pop singer Haifa Wehbe what is due to them.

It is behind some of the biggest names in Arabic music including Alissa, Amr Diab and Haifa Wehbe.

But Saudi-based Rotana finds itself losing as much as US$5 million (Dh18.3m) every year for lack of a system to collect royalty payments from UAE broadcasters, says Jihad Nehme, the executive manager for Rotana's publishing division.

Globally, performance rights organisations collect almost $10 billion a year in music, film and other intellectual property rights.

They form a centralised administration through which radio and TV stations pay for the rights to broadcast copyrighted material.

But in the UAE, the Ministry of Economy is yet to approve such a system, which means many TV and radio stations do not pay for copyrighted material they use.

Under UAE law, copyright infringement is punishable by a minimum fine of Dh10,000 and two months in prison.

But this law has never been enforced in regard to TV and radio stations, due in part to the fact that there is no formalised collection mechanism in place.

Mr Nehme said that was costing rights holders a total of about $10m a year.

"Rotana represents around 45 to 50 per cent in the market. So that means the UAE has the potential of around $10m a year," he said.

"I wish for the support of the UAE Ministry of Economy to give a green light to establish a collection society. Without this authority we cannot do a lot of things … Individually, we can [assert] our rights but it's not efficient. It's better to come as one body.

"Our opinion is very clear. If we need the music to survive, we definitely need a music collection society. It becomes an emergency. If we need to support the creation of music, we must do this."

The Ministry of Economy did not respond to a request for comment. Mr Nehme is speaking at a music rights workshop in Dubai next month, which is being organised by the International Confederation of Music Publishers.

The event, on November 9, will be attended by Government officials as well as music publishing giants such as Universal Music and EMI Music. The formation of a collection society is one of the topics on the agenda.

Piracy is also a major concern for the region's music industry.

Yousef Mugharbil, the president of Rotana Digital Media, said the media company loses about half its revenue because of the problem.

"For us as a company, for every dollar we sell, we lose a dollar to piracy. So it's that serious," said Mr Mugharbil. "The level of piracy is phenomenal."

Rotana is majority owned by Saudi Arabia's Prince Alwaleed bin Talal bin Abdulaziz Al Saud. In February, Rupert Murdoch's News Corp agreed to pay $70m for a 9.09 per cent stake in Rotana.