Streaming

Music publishing companies Reservoir Media Management and PopArabia are suing Anghami Technologies Limited and its parent, Nasdaq-listed Anghami Inc., the Middle East’s largest legal streaming company, for copyright infringement related to a dozen Western and Arabic songs from artists like Lil Jon, 50 Cent and Kelly Clarkson.

The suit was filed Dec. 22 at the Abu Dhabi Global Markets Court.

In the filing, a copy of which Billboard procured, the court says the claim by Reservoir and PopArabia involves “the exploitation of a small number of songs in one territory” but that “the Anghami service exploits a very large number of songs in numerous territories across the Middle East region and beyond.”

Anghami is primarily a freemium audio-streaming service that says it has more than 73 million users across the Middle East and North Africa (MENA), Europe and the United States, and a library of over 57 million songs. The service, which was launched by co-founders Elie Habib and Eddy Maroun in Beirut in 2012, relocated its headquarters in 2021 from Lebanon to Abu Dhabi in the United Arab Emirates, where it’s part of the Abu Dhabi Global Market. (Anghami also operates a subscription service called “Anghami Plus” that allows users to download songs.)

PopArabia, which describes itself as the “leading music publisher” in the MENA region, is also based out of Abu Dhabi. In 2020, PopArabia entered into a joint venture with Reservoir to sign and develop Arab talent

The suit names 12 songs, including such international hits as “Take Me Home, Country Roads,” by John Denver; “Candy Shop,” written by Scott Storch and 50 Cent; “Yeah!” written by Lil Jon; “I Gotta Feeling,” co-written by Frédéric Riesterer; “Havana,” “Señorita” and “Break My Heart,” co-written by Ali Tamposi; and “Because Of You,” written by Kelly Clarkson, David Hodges and Ben Moody. 

The Arabic tracks are “Laa,” written by Bassem Funky and Dok Dok; “Number 1,” written by Mohamed Saber, Fawzy Hassan, Islam Mohamed Ali and Abdel Hakim; and “LV COCO” and “Hallelujah” by Moroccan hip-hop star 7Liwa.

Reservoir and PopArabia are seeking an injunction to restrain Anghami from infringing its copyrights, as well as unspecified damages, interest and costs. The applicable law for the claim is U.K. Private International Law, the court says.

In an email response to Billboard, Saurabh Poddar, Anghami’s head of licensing, says the company intends to defend itself against the lawsuit. “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 says.

A spokesperson for PopArabia says the company does not comment on ongoing litigation but notes that “we do take the protection of our rights and those of songwriters very seriously and believe it is essential to the development of a healthy ecosystem for music creators, which we have championed for in the UAE for over a decade.”

Anghami says on its website that it has licensing agreements in place with major international and Arabic music labels, as well as with “thousands of independent labels and distributors.”

In their suit, Reservoir and PopArabia counter 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.” 

Two sources with knowledge of the case tell Billboard that in the past Anghami has questioned PopArabia about whether the company owns the rights it says it does. “In these court cases, one of the things that they will always challenge you on is the chain of title,” says a leading executive from a global publishing company who spoke to Billboard on background. “It’s much easier for PopArabia to instigate the case using [a handful of] works that they have directly signed to them.”

Licensing negotiations between PopArabia and Anghami were ongoing for at least three years before they reached a stalemate, says the source. “That’s when the question was raised, are they actually genuine in these attempts to license?”

Abu Dhabi-based media executive Michael Garin, who says he has seen the correspondence between the two companies, tells Billboard that Anghami has made licensing deals with the three major record companies, “who clearly protect their [own] intellectual property rights.” But in the case of Anghami, “it’s my understanding that for 10 years they’ve been using music from the region and from smaller publishers who they just felt were either too ignorant, too disorganized [or] too naive to ever sue for the collection of their rights,” says Garin, the former CEO of film and entertainment company Image Nation and media hub twofour54, of which PopArabia is “an investment and portfolio company.” (Anghami did not respond to Garin’s assertions.) 

Garin, who until recently was also the director-general of the Abu Dhabi Creative Media Authority, a governmental organization, says he has been “working for the past decade to help protect the intellectual property rights of content creators.”

On the support section of its website, Anghami says it generates and pays out royalties after deducting 8% for publishing rights from revenues to be paid to music-collecting societies such as SACEM. However, SACEM no longer has a licensing deal with the platform. 

“In 2018, we succeeded in getting a settlement with Anghami to cover the period of exploitation [from 2012] until 2018, but from 2019 we do not have any agreement,” says Julien Dumon, the director of development, phono and digital at SACEM. Significantly, the deal, which excluded the United States, covered usage in Europe and the Middle East. Talks for a renewal have been ongoing since 2019, says Dumon. 

“We have been negotiating for close to five years now,” he says. “The fact that nothing has been signed whereas on the other side, SACEM has been able to close deals within a year with all the other actors in the industry clearly demonstrates that Anghami is not willing to properly engage and get an agreement in place.” (Anghami did not respond to a question about negotiations with SACEM.)

The Middle East and North Africa is the fastest-growing music market in the world, as per the IFPI’s Global Music Report for 2022, which said revenues from recorded music in the region grew by 35% in 2021 to $89.5 million. Streaming accounts for 95% of those revenues. A consumer research study conducted by the IFPI in April surveyed over 1,500 people aged 16 to 44 in the UAE and found that 54% of the respondents “typically listen to at least one Middle Eastern genre.” 

With a claimed 58% share of the music streaming market in the region, Anghami is the dominant player; at least one report has said that Spotify was considering buying the streamer. 

According to a source close to the matter, Anghami initially submitted a jurisdictional challenge to the case filed by Reservoir and PopArabia and subsequently withdrew it. The streamer now has about a month to file a response in the ADGM Court. 

Beyond the copyright lawsuit, Anghami faces other challenges. The streaming service said in November that it was trimming its headcount by 22%, or roughly 39 employees, in order to maintain profitability. And on Jan. 9 the company received a notice from the Nasdaq indicating Anghami was not in compliance with the stock market’s listing rules due to its failure to file an interim balance sheet and income statement for its second quarter of 2022, according to a company filing. Nasdaq gave the company until Mar. 10 to submit a plan to regain compliance.