Why I Just Moved To The Middle East

George Pimentel

The following MBW blog comes from Spek, the founder of PopArabia, which represents an estimated 60% market share of global music publishing repertoire in the MENA region. Since 2015, Spek worked as SVP of A&R at Reservoir in New York City. Last year, he left NYC to move to the Middle East in order to head up a new-look PopArabia on the ground, in partnership with Reservoir.

I stumbled into becoming a music publisher. My life as an artist started formally as a 17-year-old rapper and songwriter, when I joined Canadian hip-hop group Dream Warriors, and set off to tour the world.

I was living the dream through my teens and 20s and 13 years later, with my life as a touring musician mostly behind me, I was offered a role to consult for a music publisher by a former manager of mine.

I was living in London then, and as I sourced acquisitions, handling relationships with partners across Europe and learning the inner machinations of royalty flow, I began wondering how music copyrights were treated globally. On a lark, I visited the United Arab Emirates in 2005 and instantly felt enamored by the place.

By the end of 2006, feeling inspired, I relocated to Dubai with the dream of setting up the first full-service music publisher in the Gulf. I was 18 months into my first job in the business and newly married. Lucky for me, my wife was down to try something new. My friends in the industry thought I was crazy.

The 2003 Gulf War was still fresh in people’s psyche, and many people I spoke to at the time thought of the entire Middle East as one homogenous market. The UAE had not yet captured our imagination as the ambitious global business destination it would eventually become, and I had never run a business before.

“We grew the business annually, slowly building up market-share by sub publishing the world’s most important music catalogs.”

Still I figured, if I fail miserably, it would make for one hell of a story! I immediately soaked myself in the local scene, trying to challenge the status quo and pushing for recognition of music rights, which was still a new concept locally. Most of the regional copyright laws were written around 2002, so it was early, heady days watching a country’s media industry being born.

By 2008, the Abu Dhabi government launched twofour54, an initiative focused on developing a content creation ecosystem in the Emirate. As a media freezone, regulator and regional investor, twofour54 got to know me through my work advocating for the rights of music creators in the region and invested in my business PopArabia in 2011.

This made us unique in the region as the only music company part-owned by a government entity. We grew the business annually, slowly building up market-share by sub publishing the world’s most important music catalogues.

By 2015 we had become the regional market leader, paving the way for music licensing in a market where it hadn’t existed previously for publishers and songwriters. That same year, I accepted a job at Reservoir to lead the company’s US creative strategy out of their New York office, while my team in Abu Dhabi continued pursuing PopArabia’s Middle East mission.

A lot has happened over the past five years: our Reservoir team has had a string of hits, marquee signings, Grammy nominations and wins – and we have grown our presence by adding killer creative teams and operations in Los Angeles and Nashville, while expanding our award-winning team in the UK.

We’ve regularly been in Billboard’s US Top 10 market-share reports for music publishers, ranked as high as No. 5, and we continue to grow organically. Throughout all this success, I found myself fascinated by the growth of music streaming, especially as subscriber penetration reached a tipping point in the West. Streaming had become a revenue behemoth and the whole paradigm had evolved. Our business shifted from releasing albums to releasing playlists. ‘What will this mean in emerging markets?’, I wondered.

I’ve spent the last few years chasing an answer and what seems obvious is streaming will and has already begun to alter: (1) what foreign markets mean to our global industry; (2) our historical approach to rights management; and (3) perhaps most interestingly, the way we define ‘pop’ as a people.

“Developed western markets may be tastemakers, but emerging markets will be where scale is achieved.”

The streaming business model is based on a simple premise: the service is provided for free, and within three months some percentage of freemium users will convert to paying subscribers. Under this model, market population inevitably dictates the scale streaming companies can reach. Developed western markets may be tastemakers, but emerging markets will be where scale is achieved.

I’m not the only one who sees this coming; According to a 2019 report, Goldman Sachs projects there will be 1.15 billion people globally paying for music streaming by 2030, and 68% of them will be located in emerging markets. The US, a market of 325 million people, has long been the number one music revenue market in the world, in large part because it has historically been the largest sufficiently regulated music market.

Throughout Asian, African and Middle Eastern markets, rampant CD piracy was often the reality, and with a lack of collecting societies (or challenges in enforcement), a music publisher couldn’t easily monetize their rights. We were resigned to an industry reality where we made 80-90% of our revenue from 10-20% of the world. Developed markets inherently became the industry’s focus out of necessity.

Streaming is changing that. It has become the primary source of revenue for the industry, and streaming services are bypassing the traditional infrastructure around rights management, doing deals directly with rights holders, even in markets where infrastructure is missing. We’ve moved from a one-time transaction (an album sale) to a transaction occurring every time a song is listened to.

We are also monetizing nearly 100% of the time, a far cry from the days where piracy on physical sales across Asia/Africa was up to 90% or more. As the historical market leaders, developed western markets have long defined ‘popular’ music – influencing not only the music we hear in the West, but what reaches into local markets in all corners of the globe. However, the lessons we have learned from streaming in new markets has highlighted an underlying emphasis on local music.

In China for example, it has been reported that only 2.5% of content on local music platforms is local Chinese content, but that 2.5% accounts for approximately 70% of the country’s music consumption. So, while the business model of yesterday was the export of Anglo-American pop music around the world, this new normal underscores consumers’ hunger for content from native creators in local languages. With billions of people in Asia and Africa, the power in numbers is undeniable.

Once that reality upends the historical status quo, I wonder how will that alter the fabric of global pop music and A&R as we know it? Pop is capricious, she goes where the action is – and right now, the action is moving eastward. DJ Snake’s Taki Taki, a cultural hodgepodge that brings together artists of different cultures and languages, was the most streamed song in Q4 2018. BTS’s Black Swan recently went to No. 1 on the iTunes chart in its 103rd country, breaking a record formerly held by Adele.

A little closer to home, earlier this year I had the opportunity to connect two of our Reservoir writers, Indian hip-hop star Divine with BritishJamaican dancehall artist Stylo G, the result was the song Mirchi – a mix of hindi raps and Jamaican patois to a Latin groove and an Indian harmonium riff; the song hit over 10 million streams in less than a week and is on track to becoming the biggest song of both their careers.

These are not anomalies. As we see the launch of new global streaming charts, aggregating streams from all services around the world for the first time, we must ask what will the Top 20 look like week-to-week, once emerging markets have built up their subscribers?

Here’s a clue: it won’t be dominated by the Anglo-American hits that has defined our pop music for decades. Yet it’s still early days and things are changing fast. The big, multinational streaming services have only just entered many of these markets, and though they face a slew of challenges in converting people, when trying to understand the opportunity in the Middle East I tell people don’t take my word for it, just follow the data. The region is comprised of an estimated 484 million people, 40% of which are under the age of 25.

“As we see the launch of new global streaming charts, aggregating streams from all services around the world for the first time, we must ask what will the Top 20 look like week-to-week, once emerging markets have built up their subscribers?”

Some of the highest broadband, social media, and mobile penetration in the world is in the Gulf states. Mobile phone penetration in Gulf markets like the UAE averages higher than two phones per person. There are little to no taxes and high levels of disposable income. Saudi Arabia is YouTube’s number two market in the world by stream count (second only to the US) and thus, on a per capita basis, YouTube’s number one market globally.

Only a few years ago, movie theaters and playing music publicly were banned in Saudi Arabia. The country is now invested in opening 2,500 cinemas over the next five years with public events, concerts, and music festivals on the horizon. Meanwhile, in India, a revised copyright act, the reconstitution of the IPRS and local mobile operators effectively absorbing the cost of data consumption for streaming services has led to a huge upswing in adoption and a youthful appetite for new local content.

So yes, the music industry is poised for incredible growth, but it’s not because established English language pop stars will end up being 4X bigger than they already are. It’s because there’s new content expanding out of new markets. The influence of American and English language artists will continue, but the underlying fabric of pop is changing. You might say pop is moving from Campbell’s soup to a global gumbo! So why would I move back to Middle East from New York?

It’s a big world out there and I’m excited to be returning to run PopArabia, empowered by twofour54 and my new partners at Reservoir as we look to the next decade and beyond. I am eager and well-positioned to use my base in the UAE to lead Reservoir’s endeavors into new markets focused on the dynamism in MENA, Asia and Africa.

I believe the change I’ve outlined is quickly becoming a reality, and I intend to be on the front lines, leading the charge, delivering solutions to historical challenges and investing in local music that will travel around the world and tell its story. Just as I began this mission years ago, I remain bullish about the prospects ahead and no matter how this unfolds…it should be one hell of a story!

This article originally appeared in the latest (Q4 2020) issue of MBW’s premium quarterly publication, Music Business UK (pictured), which is out now.

MBUK is available via an annual subscription through here.

All physical subscribers receive a complimentary digital edition with each issue.Music Business Worldwide

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