Spotify rival Anghami sued by PopArabia, Reservoir over allegedly streaming unlicensed songs

Anghami, Spotify’s rival in the Middle East and North Africa region, is facing a copyright lawsuit over allegedly streaming unlicensed songs.

Music publishing company PopArabia and its partner Reservoir Media filed the lawsuit on December 22 at the Abu Dhabi Global Markets Court against Anghami Technologies and its parent, Nasdaq-listed Anghami, Billboard reported Friday (February 24), citing a copy of the court filing.

Reservoir and PopArabia are accusing Anghami of “the exploitation of a small number of songs in one territory,” and of exploiting “a very large number of songs in numerous territories across the Middle East region and beyond.”

The lawsuit follows the news from November that the streaming platform had reduced its headcount by about 22% and slashed its cloud computing costs by 19% as part of “tough measures” to maintain its profitability.

“Given the impact of challenging macroeconomic conditions, we had to take some cost disciplinary measures to improve our bottom-line performance,” Eddy Maroun, CEO and co-founder of Anghami, said at the time.

Anghami, launched in 2011 by Elie Habib and Eddy Maroun in Lebanon and now based in the United Arab Emirates, claims to have more than 73 million users in the MENA region, Europe and the US, with access to over 57 million Arabic and international songs that users can stream and download.

The company says it has licensing agreements with major international and Arabic music labels. It also has partnerships with “thousands” of independent labels and distributors, according to its website.

However, Reservoir and PopArabia are arguing that while “Anghami may indeed have licensed the copyright in certain sound recordings from record companies, it has not…obtained any license to use the underlying musical and lyrical works which are embodied in the sound recordings which it offers to consumers for streaming and downloading, or to reproduce the lyrics of those songs,” Billboard reported.

The companies are reportedly seeking an injunction to restrain Anghami from infringing copyrights, in addition to unspecified damages, interest and costs.

In response to the lawsuit, Saurabh Poddar, Anghami’s head of licensing, reportedly told Billboard that the company “is concerned that a number of the points made are wrong and defamatory.”

“Despite having this claim for a handful of songs, we assert that Anghami is more than willing to sign a license with publishers no matter how small or big they are, as long as such license is negotiated and implemented with a scientific method with regards to identification of actual market share, legal capacity and provided representation is confirmed especially in the case of a sub-publisher,” Poddar was quoted by Billboard as saying.

Meanwhile, two sources with knowledge of the matter reportedly told Billboard that Anghami had questioned PopArabia in the past about whether it owns the rights that it claims to have.

One of the sources added that Anghami and PopArabia have been in talks about licensing for at least three years before they reached a stalemate.

Anghami holds a 58% share of the music streaming market in the MENA region, says Billboard. The MENA region, according to IFPI’s Global Music Report for 2022, is the fastest-growing music market globally.

In December, Anghami disclosed its plans to become the first platform to host over 200,000 songs generated by Artificial Intelligence after partnering with generative music platform, Mubert, to allow users to create “unique soundtracks” for various uses such as social media, presentations or films.

Nasdaq-listed Anghami ended the first half of 2022 with 1.28 million monthly paying subscribers, up 41% year over year, as revenue surged 29% during the same period to $21.1 million.

Meanwhile, PopArabia and Reservoir have been partners for at least three years after the pair signed an agreement in 2020 to form a joint venture to sign and develop Arab talent.

That partnership saw the acquisition of Lebanese label and music publisher Voice of Beirut in September 2022, and Egyptian record label 100COPIES in May 2022.

In response to the two companies’ claims, Anghami’s Head of Licensing, Saurabh Poddar, told MBW in a statement on March 3 that Anghami is “defending the lawsuit legally”

Said Poddar: “As the region’s premier and legitimate music streaming company, listed on NASDAQ, we are fully committed to ensuring that the copyrights and intellectual property of all our stakeholders are honoured. Since our inception, we have only published music works based on clear licences that remunerate creators and rights holders. 

Added Poddar: “Despite the absence of a collecting society and neighboring rights frameworks in the UAE and many parts of the Middle East and North Africa region, we have also been working with industry stakeholders, especially the International Federation of the Phonographic Industry (IFPI), local authorities and the music industry, to improve and grow the music ecosystem.

“In this, our primary focus has been to protect the rights of the holders and ensure that the royalties go to rightful owners. We wish to reiterate that we engaged in good faith with PopArabia to conclude a fair and transparent publishing licence framework for works that PopArabia claims to represent as a sub-publisher. 

Elsewhere in the statement, Poddar claimed that “Despite our repeated requests, PopArabia did not provide any supporting documents to its claims of representing over 20 publishers” and that in order to “ensure that these publishers do not miss out on their rights,” Anghami claims to “have taken the measures to contacting them to conclude direct licenses”. Music Business Worldwide