Guest Articles

Walk into a shopping centre in London, a restaurant in New York or a hotel in much of Europe and the music playing in the background isn’t simply coming from someone’s Spotify account. Behind it, sits an established system of public-performance licensing, rights organisations and royalties designed to compensate the songwriters, performers, publishers and other rights holders whose music is being commercially used. How those royalties are calculated and ultimately divided has, of course, long been a subject of professional and public debate.

In the UAE, that part of the music economy has historically been far less visible. What is now changing is the infrastructure around how those rights are collectively managed, licensed and distributed.

With licensed collective music-management organisations now operating in the country, malls, hotels, restaurants and other businesses using music commercially are beginning to encounter something that has been standard practice across many established music markets for years: paying for the commercial use of music.

Predictably, it has also created confusion.

Why should a mall have to pay to play a song?

Isn’t the music already being paid for through another streaming service?

Who actually receives the money?

And if businesses across the UAE are now paying into this system, how do we know the creators, whose work generates those fees, will actually see them?

Those are fair questions, and the simplest place to start is with what businesses are actually paying for.

When a mall, hotel, restaurant or other commercial space pays a licensing fee, it isn't paying to own that music. It is paying for the right to use it publicly as part of its environment. Music contributes to atmosphere, customer experience and, ultimately, the commercial value of a space. The principle behind public-performance licensing is that the people and companies responsible for creating that music should share in that value.

“But haven't we already paid for the music through Spotify or Apple Music?”

This is probably the easiest point to misunderstand. A subscription to a streaming service gives an individual access to music under the terms of that service. Using music publicly within a commercial environment is a different type of use, with separate rights attached to it.

When Music Has Value: Understanding the UAE's New Licensing Landscape

A simple analogy would be Netflix. Paying for a Netflix subscription gives you the right to watch a film at home. It doesn’t mean you can then put that film on a large screen in a commercial venue and show it to hundreds of customers. The content may be the same, but how you’re using it is different, and therefore the rights involved in doing so.

Put simply, paying to listen to music and paying to use music commercially are not the same thing.

“So, who gets paid? And how do we know the money actually reaches creators?”

Music rights are complex. A single piece of recorded music can involve several different rights and rights holders. These could range from songwriters and composers to performers, publishers and the owners or producers of the recording. The purpose of collective music licensing is to collect fees for the use of that music and distribute royalties to the relevant rights holders.

This is where understanding how the system works becomes important. The UAE framework rightfully includes requirements around reporting and distribution. Collective management organisations are required to distribute returns to their contracted rights holders at least annually, provide information around the use of their works and amounts collected, and maintain mechanisms governing how those royalties are distributed.

For the UAE, this represents an important evolution of the music economy.

Rather than looking at the introduction of licensing simply as another cost being placed on malls, hotels, restaurants and venues, it is perhaps more useful to understand what is being created around it: an ecosystem in which music is formally recognised not just as entertainment, but as intellectual property with commercial value.

For artists, songwriters, producers and everyone involved in creating that music, that distinction matters.

Authors: 

Dan Bolton, Founder BE. Creative and Hussain Alidina, Music Industry Professional