Conceptual framework

Stories from Egypt’s music industry

Egypt holds a privileged position in the regional artistic landscape, with many referring to it as the capital of the Arabic music scene. The country has been a fertile territory for multiple genres of music and various models and opportunities for access to audiences and for making gains. Historically, aspiring musicians from all over the Arab world came to Egypt in search of success and fame. For Egyptians, music has always been an experience good associated with historical landmarks, social and political events, experienced more in groups and gatherings than in private. A rich live scene has always characterized Egypt’s music industry, whether in formal concert halls or in the small town caf豠or bars.

Despite this rich tradition, there is no scholarship on the economics of Egypt’s music industry, nor on its relationship to intellectual property. Indeed, there are no publicly available statistics on sales, revenues or employment within Egypt’s music industry. This work is therefore built on extensive fieldwork involving interviews with musicians, producers, label representatives, government officials, live performance agents and consumers. Where possible, quantitative data have been obtained from these sources, although in many instances these are informed estimates, rather than based on documenting accounting. The current study does not offer a comprehensive coverage of Egypt’s music industry. Rather, it is a selective attempt to understand the economic realities of three co-existing business models: the mainstream market, the independent alternative music scene and the digital world of downloads.4

In the following sections I tell two competing stories taken from the music industry in Egypt and, in conclusion, trace a common thread between them. The first is the story of the commercial market for pop stars that sells music as a commodity, earning revenues from CD sales as well as live performances. The second is the story of alternative musicians whose livelihood depends almost exclusively on the live music scene. The common thread is this: within each story, a compromise is made via a model of social commons that eases the tension between users and produces and resolves the access-incentives trade-off. The compromise is the de facto commons attained by the live scene that is at the core of Egypt’s sociocultural tradition, and whose importance is emphasized thanks to economic and legal realities. In some instances for alternative bands, the commons may take the form of free offering of music; in others, the commons may cross the line of legality as illustrated in the illegal copying, sharing and downloading of commercial music. In all instances, the compromise takes place irrespective of copyright.

The first verse : the mainstream world of the pop stars

The mainstream music market in Egypt is dominated by a few major recording companies, most notably Rotana followed by Alam El Phan. Both labels own their satellite channels, which are important outlets for promoting singers through music videos, commonly known in Egypt as “video clips.” These short music videos have become an important pillar of success for Egyptian artists within a music culture that has grown increasingly interested in the visual. The overall scheme of production firms is geared toward exclusivity (Mischiatti interview 2007), leaning toward music being a private rather than a public good. Musicians typically sign long-term contracts, up to three years, with the music labels. Under the typical contract, the label holds exclusive rights to the artist’s work, including those to the singers’ performances in concert and in video clips.

As illustrated by Figure 4.1, Rotana owns the bulk (75%) of the Arabic music market share.6 According to the company’s public materials, its number of singers has reached over 100 in 2008. The company has a set of six satellite channels, four of which are dedicated to music (Romer 2002).7 Alam El Phan, runs two music channels, Mazzika and Zoom.8 At one point of time, Mazzika was sold to Rotana, but then it was repurchased by Alam El Phan. Although a number of other labels compete in the Egyptian music industry, none of these smaller companies own satellite channels, and their market share is much smaller.9>

According to Alessandro Mischiatti, marketing manager of Alam El Phan, the company assumes the role of the producer and the manager of the singer. In other words, it produces the record for the singer and at the same time manages all communication with distribution entities and any other entities in demand of the singer’s music. This gives decision-making capacities to the company with regards to distribution as it owns the rights to the songs. The same model holds within Rotana. Both labels typically strike deals on a per-album basis, under which they hold exclusive rights to the artists’ performances of the work – in concert, on disk, and in video clips – for a given period of time, usually 1-2 years. Independent producers or artists may also sell the exclusivity rights of a particular release to the music channel for a certain period of time.

Egypt’s mainstream model of revenue sharing typically has the record label assume the role of music producer and distributor at the same time. According to Mirage record label representatives, this is a major difference from the international business model, whereby the record label is usually responsible for the production and management of the musician’s artistic output, and shares revenue both with the artists and with a partnering distributor who is responsible for supplying the record to the different sales outlets (Maher interview 2007, Tosson interview 2007). In some instances in Egypt, however, the artist acts as their own producer, in which case revenue is shared between the artist and the distributor, where the latter receives only a percentage of the sales revenues and does not share in proceeds from live performances (Tosson interview 2007).

In both cases of Rotana and Alam El Phan, income through the satellite channel is generated from a variety of strategies. These include: sales of advertisements,10 competition programs that involve paid calls and text messages from cell phones, the sale of digital ring tones, and other deals with mobile operators and online music services in exchange for a share in the revenues of charged downloads (Mischiatti interview 2007). The main market strategy is hence getting more exclusivity deals and constant update of content.

Although the contracts between artists and companies typically accord the labels exclusive rights to performances, album sales, and broadcasting, enforcing these rights is easier in some areas than in others. Expounding on the nature of this control, Mischiatti of Alam El Phan says:

The music industry is highly exclusive, for example, songs produced by one of the music channels would not be broadcasted on any other music channels. Singers who move from one producer to another at different timings of their career have to abide by an exclusive clause in their contract with any of the different producers, namely that the singer loses the rights to his/her own songs produced by an entity once he/she shifts to another production companies, i.e. the singer cannot sing them in concerts, on TV shows and in weddings. But since tracking is a tough job for the production companies and lawsuits take forever in Egypt, it happens from time to time that singers do breach this contract clause and do receive warnings from their previous producers. (Mischiatti interview 2007)

Not only live performances but also recorded sales are difficult for labels to police. Black market sales of CDs have long been a reality; the new era of illegal file sharing only accentuates this difficulty. In this context, ownership of a satellite channel becomes crucial to generating revenue; in this form of distribution, at least, the competitors continue to respect each others’ exclusive rights. Moreover, while access to satellite channels requires subscription, a common practice in Egypt is to have unauthorized access through what is termed “the connection.” This is a model whereby one subscriber pays the subscription fees (initial fee of LE350 (equivalent to a little over $60) and a monthly fee of LE160 (equivalent to just under $30), then offers unauthorized extension cords to different homes in return for an initial subscription fee of LE60 (equivalent to a little over $10), and a monthly rate of LE20 (roughly equivalent to less than $4). An illegal model of shared access to the content of satellite channels, the connection offers an affordable alternative that is more suited to the economic realities of the country, and that expands access, albeit not offering monetary reward to the channel owners.

The highly concentrated nature of Egypt’s music industry shows no signs of changing in the near future. Other companies have found it difficult to continue producing music for singers, since they have no music channels on which they can broadcast video clips for their stars, which is a cornerstone to the album’s success. This is becoming increasingly important given that voice is not the only key to popularity, but other elements also play a role such as image and art directing. Some companies said that the market was controlled by major players leaving no space for small players. In addition, ongoing and consistent illegal copying, downloading and file sharing have left such companies with little gains to make.

Both mainstream labels have also created their own digital download models, with new technologies making the process of downloading music to computer or mobile phone a fairly easy and accessible process. In the case of Rotana, its website sells mp3 music paid for by credit cards, at $0.99 per song. Alam El Phan, on the other hand, has developed a more complex model available only for Egypt. Streaming and downloading of songs and videos are paid for by credit points earned by hours of access to the Internet through a particular dial-up number. Alam El Phan’s website also offers the sale of hard copy CDs and DVDs using the same credit system, as well as by credit card (www.alamelphan.com).

Alam El Phan also introduced another venue for music downloads via mobile phone. The company’s satellite channel Mazzika launched Mazzikabox.com, whereby Arabic music is downloaded to mobile phones via software that is freely provided. Songs are sold for LE1 (less than $0.20) which is deducted from the customer’s phone credit and paid automatically upon the song download. Customers have a choice of downloading the mp3 or the ring tone version of the song. By offering digital music via the combination of Internet and mobile telephones, Mazzikabox stresses convergence as their unique selling point, which differentiates them from other music providers. With a rapidly growing mobile penetration that exceeded 50% in 2008, mobile phones are becoming a growing platform for music delivery in Egypt. The introduction of the 3G mobile technology in 2007 has made the mobile technology an even more suitable platform for music distribution in the country.

Both of the above models represent legal downloading websites tied to a label. There are independent websites that also offer legal downloads, the first of which in Egypt is Mazika.com (www.mazika.com),11 which was bought by one of the major Internet providers (Linkdotnet). Mazika used to send warning letters to illegal websites to sign onto their digital rights management and revenue share or else they would report the site to be closed (El Baradei interview 2007). Mazika sells mp3 music at a price of LE1 per song (less than $0.20); payment is made using prepaid debit cards, the credit for which is bought by a credit card. Mazika has signed contracts with both major labels where revenue is shared in half, and also signed with individual musicians, in which case the artist receives 50% of the sale price (Barakat interview 2007a, Sobhy interview 2007).

The social commons for pop stars : live is king

The importance of the video clips is matched only by the significant role played by the live scene in promoting pop stars in Egypt. Traditional culture carries on in the prominent play that live performances continue to enjoy in Egypt. Good summer weather encourages frequent and popular beach parties featuring pop singers. Live performances in major hotels are also frequent, especially in festive times and during holiday seasons when tourists come from neighboring Arab Gulf countries. Hotels compete for the top pop stars; the choice of star is a sign of the venue’s prestige.

Source: Compiled based on information in providers’ websites.

Then there are wedding parties. In the Arab culture, marriage is a highly celebrated life event for young people coming of a certain age; arranged marriages are not uncommon. Egyptians have a strong preference for live music at wedding parties, which emphasizes the nature of music as an experience good rather than a commodity. The small stratum of the upper class tends to make an excessively lavish show of its wealth in the form of extravagant weddings. This flagrant show of luxury is especially seen among families with newly acquired wealth. Families may live in debt, if only to ensure that their sons and daughters have the proper and prestigious wedding. The choice of a wedding singer is a most important status symbol. Pop stars are usually at the center of this choice, and are, naturally, in high demand.12

The live performance market for pop stars is an interesting case study in supply and demand. On the one hand, there is a strong and inelastic demand coming from the public as illustrated in weddings and other live parties. On the other hand, supply is offered by the pop stars, each being a monopolist in their own right. The pop star charges exorbitant rates for weddings, which are multiplied by two to three times for the live parties. There is a price for “superstardom” as talent is not replaceable, nor is it additive (Connolly and Krueger 2005). The market then settles at a high equilibrium price for each pop star. In weddings, the rate ranges from the equivalent of almost $37,000 per performance for the top Egyptian singer, to the equivalent of $930 for the lowest (Salem interview 2007). Lebanese singers may charge between $25,000 to $40,000, in addition to covering expenses of travel and accommodation for themselves and their accompanying musicians (Salem interview 2007).

Given the considerable revenue that top singers earn from live performances, the major record labels have recently pushed singers to agree to recording contract provisions that give labels a share of the singer’s live performance proceeds. Even when singers acquiesce in the labels’ demands, however, such provisions are more easily enforced in the case of concerts than weddings. Weddings can be informally contracted, with artists wanting to cash in on the wedding proceeds in return for their effort, and seeing little reason to share their earnings with a label. There have been disputes between artists and labels on this particular issue.

How do artists’ earnings from live performances compare to their earnings from the sale of copyrighted recordings, namely tapes and CDs? Put another way, what is the relative importance of the copyrighted recording, as opposed to the live performance, from the musician’s perspective? The major challenge faced in attempting to answer this question is the lack of publicly available information on sales of musical units, proceeds from royalties, and any receipts of major labels out of the live performance. To overcome this challenge, I gathered information on a top Egyptian pop star (whose name is withheld) whose contract with the major label was highly publicized and the figures confirmed by almost all interviewees. I made a rough estimate of the artist’s earnings from weddings and live parties based on the artist’s live performance rate (as provided by the wedding and party agent at a major hotel) and frequency (as estimated by an accompanying musician). Although this exercise is preliminary and provides only one data point, I believe that this artist’s situation is roughly representative of major pop stars in Egypt today.

This particular artist had signed a deal with the major label whereby a lump sum of $5 million was paid at the signing of a three-year contract. Under the terms, the label obtained exclusive rights to satellite broadcasting and copyrighted merchandise (CDs, downloads, etc.), but with all rights to a share in live performances waived. The artist’s annual earning out of copyrighted recordings may thus by imputed by dividing the lump sum of $5 million over the contract term of 3 years, yielding an annual earning of $1.67 million a year. My estimate of the artist’s earnings out of live parties and weddings over the same three-year term totaled $7.88 million.13 In short, this artist’s earnings out of the live performances totaled 4.7 times those coming from the sale of copyrighted recordings. As I mentioned earlier, this particular case was calculated based on the fact that this singer received a lump sum payment upon signing the contract in lieu of percentage of sales. This is typical in Egypt, partly due to the weak institutional structures to ensure efficient implementation of the collection mechanism (El Kashef interview 2007). Even if pop stars supposedly receive percentages out of the sales, a good part of that escapes the collection chain in most cases. The latter is partly the result of a lack of proper accounting mechanisms, as well as inaccurate reporting on the part of vendors (Ousso interview 2007). Indeed, the weak institutional structures in Egypt have meant that musicians who sign to percentage of sales rarely receive their due share via the collection chain (Salama interview 2007).

Thus, although an estimate for only one artist is presented here, I expect most artists’ relative earnings out of copyrighted recordings to be quite modest. Even where the rate charged for live performances is lower than the singer under study, I still expect the ratio of their earnings of live performances to copyrighted recordings to be high, given the negligible proceeds from copyrighted sales.14

The claim that live performances weigh much more heavily in musicians’ earnings in Egypt than do revenues from sales of music recordings is made stronger by the fact that sales of recorded music are generally declining, due in part to illegal copying and file sharing, with no similar signs for the live music scene. One published statistic shows that the steepest decline in global production of music units (cassettes, CDs and DVDs) by region in 2004 was witnessed in the Middle East (-13.3%,) followed by Australasia (-5.8%), with an average world rate of -0.4% (IFPI 2005). The decline in the production and sales of licensed pop music albums further shrinks the already limited return to musicians from copyrighted recordings.

In light of the above, I argue that the thriving live music scene – rather than sales of copyrighted recordings – seems to offer the venue where artists and music lovers are brought closer together in the mainstream market for pop stars. Artists’ main earnings come from the live scene. Under the prevailing differentials in artists’ earnings between the live performance and the copyrighted recording, and in light of a weak enforcement of the copyright law and the weak institutional structures, artists use the copyrighted item as a reputation device, while the main benefit is achieved through the live performance. Music lovers are also comfortable with accessing music through this group experience within social gatherings and irrespective of copyright. While the major labels continue to deal with music as a private good, what seems to take place in the tension between access and incentives is resolved through a special form of de facto commons that is not restricted by copyright, and that is more aligned with the sociocultural context and economic realities in Egypt.

The second verse : the alternative music scene

An alternative music scene is developing in Egypt independent of the mainstream commercial space, featuring bands that perform outside the commercial channels and provide an alternative voice that is often associated with social rebellion and political dissent. These groups play a wide array of genres, ranging from rock, to metal, to Latin, to Arabic and oriental jazz. This clique of musicians has been slowly making an entrance into the music market that is traditionally dominated by mega-producers focusing on pop stars. Bands and singers predominantly show in private cultural venues and centers which act as their point of liaison with their base of audiences. Main players in this underground scene like to dub themselves as the alternative to the operating mainstream, and not simply groups who happen to fall outside an existing framework. Some groups like to call themselves independent to emphasize their freedom from all possible constrains manifested in business deals or political affiliations.

The beginnings of alternative music in Egypt may be traced to the early 1990s, with two young bands that played original hits, mostly rock (Ousso interview 2007). Alternative music in Egypt suffered a major setback due to the police crackdown of 1997 associating musicians with satanic practices and improper ethical conduct. Many alternative musicians were jailed and the rest were subjected to strong family pressures. Nevertheless, alternative music still survived the dramatic “satanic” trauma. A more solid beginning finally came in the early 2000s, with the creation of outlets catering to alternative musicians. These ranged from pubs hosting live music, to bigger cultural spaces continuously promoting artists. Examples of the former are the Cairo Jazz Club and After 8. The latter are particularly considered a breakthrough for alternative musicians, especially Al Sawy Cultural Center and Al Genina Theater.

The outlets

Since it started in 2003, Al Sawy Cultural Center, also known as Al Saqia, catered to the needs of alternative performers and bands by hosting concerts, where they facilitated sound and light equipment as well as media advertisement. Literally translated as “cultural wheel,” Al Saqia was built on the site of a garbage dump under a flyover by the Nile. The center transformed the role of the middleman in the music industry by “removing the concept of CVs,” to use the words of its founder and director Mohamed Al Sawy (Al Sawy interview 2008). In other words, performing singers and bands do not need to have a long history in performance before approaching the center for a concert. In terms of revenues, the performing band does not bear any cost, since all equipment as well as the space is provided by the center. Revenues from ticket sales are typically shared equally between the space and the band, although in some instances the artist may get up to 70%, depending on his or her popularity and good performance. In the rare cases when an alternative band or singer has a CD, these are made available for sale at the show; the center gets 20% of sales. The center then covers half its costs from ticket and CD proceeds and annual membership fees which are set at a modest rate of LE30 (equivalent to $5.5) in return for a discount of LE5 (a little under $1) on concert tickets plus free access to the library and use of facilities. The center covers the remaining 50% of its expenses through sponsorships from corporate social responsibility initiatives by major companies such as Alamiya (Mr. Al Sawy’s own establishment), MobiNil, Juhayna, the Arab African Bank and Egypt Air. The Al Sawy Cultural Center’s sustainability depends upon the renewed support of his sponsors each year. The Director also plans to launch “Sound of Saqia,” an Internet radio initiative with advertisement as a source of income (Al Sawy interview 2008).

Al Saqia hence brings musicians and consumers closer together. On the one hand, it provides an entry point for nascent bands that do not have a lead into the commercial world, by giving them the exposure and the opportunity to keep their own copyrights, at no cost. On the other, it equally provides for easy access to the public, with inexpensive tickets ranging from LE10-25, roughly the equivalent of $2-5. With two separate theaters, the space will often run two concerts every day and crowds are often seen gathering on the streets awaiting the opening of the doors. Al Sawy himself has boasted that 750 music concerts were held in Al Saqia in 2006, mostly performed by alternative bands. In the meantime, it stays a nonprofit organization, with sustainability generated largely by mere good intentions and commitment to support young talents, and with live performance as its primary mode of music delivery to customers.

(The Cultural Resource) is another nonprofit outlet catering to alternative musicians in Egypt and other Arab countries. Its scope covers all performing and self-expressive arts as well as experimental works crossing over different arts media. Al Mawrid offers production awards through an open application process with grants ranging from $500 to $5000 for young musicians to produce their own record, to which the artists retain copyright. The awards have allowed the production of five CDs so far. Revenues of the LE55 CDs (roughly equivalent to $10) are divided as follows: 20% to the retail shop and 80% to production. Out of the latter 80%, 50% goes to the producer, 30% to the distributor and 20% to the band (Abdallah interview 2007, Ousso interview 2007). In other words, out of every CD sold, the band gets roughly the equivalent of $1.60.

According to Mohamed Abdallah, the program coordinator, Al Mawrid Al Thaqafi attaches particular importance to engaging international donors, whether private or governmental, in conversations that result in generating funds and giving more attention to the independent cultural sector in the region (Abdallah interview 2007). In addition, it seeks to explore possibilities of building long-term partnerships with the corporate sector in the region. In the meantime, Al Mawrid has also sponsored the opening of a performing space, Al Genina Theater that, like Al Sawy Cultural Center, provides alternative bands with a performing venue and an exposure to audiences.

Another initiative that focuses on the revival of traditional music is “Makan” or the Egyptian Center for Culture and Art, which hosts live performances and records releases. The thrust to focus on traditional Egyptian music, as expressed in the Center’s mission statement, is to recreate a place for it in the everyday life of Egyptians. “Traditional Egyptian music is increasingly in danger of being relegated to the status of an exotic tourist curiosity, a showcase of national identity or a place on the shelves of academic archives, all of it far from the daily lives of its dwindling practitioners” (El Maghraby interview 2007). A series of cassettes, CDs and DVDs have hence been produced by Makan, alongside regular live performances by groups coming from different parts of Egypt and whose reputation may be limited to their own, sometimes remote, environments in rural Egypt. This initiative has been recognized by the Society for Ethnomusicology, which awarded the Makan Center the Lois Ibsen Al Faruqi Prize in 2005. According to Ahmad El Maghraby, the initiator and Director of Makan, cheap entry tickets to performances, ranging between LE5 and LE20 (between $1 and $5), cover a quarter of the concert’s expenses. Well-to-do customers are encouraged to buy more than one ticket since, so far, ticket sales have been Makan’s major source of funding (El-Jesri 2005 2005). Despite that and its small capacity (a maximum of 50 tickets), Makan still offers no advertisement but counts only on word of mouth as the means of filtering the audience to ensure attendance only by music lovers (El Maghraby interview 2007).

Makan hence offers another alternative model of the middleman, giving opportunities of exposure to groups falling outside the scope of Cairo, in a context where the industry is extremely geographically polarized into the capital city. Makan also serves its audience by providing them with affordable access to artistically produced music genres that have become scarce and, at best, exoticized. The business model by which this mission is implemented provides satisfactory solutions for both the artists – through exposure and revenues from CDs and performances – and to the audiences via cheap entry tickets.

From an economics perspective, it is notable that all of these centers produce music on the model of a quasi-public good. The model has some characteristics of a private good, in that the partial excludability of music is exploited in order to charge concertgoers for access to a unique live performance. This revenue model does not, however, depend upon copyright enforcement to protect the excludability that ensures its success. At the same time, the model has some characteristics of a public good, in that it relies in part on donations from public-minded individuals, corporations and foundations, to produce something that is considered to hold significant value for the Egyptian public generally. This raises the question of whether the quasi-public model of alternative music production is sustainable in the same way as the purely private model of mainstream music production.

For alternative artists, live is livelihood

Like the mainstream pop stars, alternative bands earn from live performances, albeit less lavishly. Weddings are not usually an option for alternative musicians, since pop stars are the ones usually sought after there. Alternatively, live concerts hosted by an array of organizations become the venue for live performances for alternative bands. In addition to the nonprofit music performance centers described above, private venues such as select bars in Cairo (After 8, Cairo Jazz Club) offer opportunities for live shows hosted by alternative bands. However, and unlike in Brazil where pubs and clubs offer a for-profit venue for alternative bands (Mizukami and Lemos 2008), nonprofit cultural venues are the main outlets for Egypt’s alternative musicians since there are only a few bars that host a live music scene in the country.

Given the high ratio of earnings from live performances as compared to copyrighted sales in the mainstream pop star context, what is the situation like for alternative musicians? I attempted a similar exercise, based on accurate information provided by the lead musician of the leading alternative band, Iftikasat (Ousso interview 2007). This band produced one CD as the winners of the competition organized by Al Mawrid Al Thaqafi. They also frequently perform in the popular outlets (Al Sawy Cultural Center and Cairo Jazz Club). With the help of the band leader, I estimated their annual earnings out of live concerts at $4800, compared with annual earnings out of the CD at $360. This represents an earnings ratio of 13.3, weighted even more strongly in favor of live performances than the ratio of 4.7 obtained for the mainstream pop star.

It is to be noted that this band is one of the few alternative bands that have had a CD produced. It is more often the case that an alternative band’s earnings out of copyrighted recordings stand at absolutely zero, and hence the band’s livelihood depends solely on the live performance. One may philosophically argue that for zero earnings out of copyrighted recordings, the ratio of live performance to copyrighted items earnings is indeed infinity for Egypt’s alternative musicians.

The artists’ perspective on incentives and access

What do alternative artists themselves think about the tension between expanding access versus preserving financial incentives at the heart of the copyright debate? To find their perspective, I put this question to three such artists.

Iftikasat is one of two bands leading Egypt’s alternative scene. For Ousso, the band leader, the Internet is a key element of success for alternative musicians. “Best way to promote music is put it freely on the Internet as a promotion to the bands. Next will come the live performances, and this is where the artists can make money.” Ousso thought that this type of free access is only relevant to the realm of alternative music, where tunes and lyrics are more representative of peoples’ lives and are more likely to be identified with. The mainstream artists reap higher financial rewards through copyrighted business models but, in Ousso’s view, catering to this market comes at a price: “It is fair to say that the music is the voice of the people, especially that the lyrics of commercial music have deteriorated tremendously” (Ousso interview 2007).

The second is Wust Al Balad, one of the Egyptian alternative bands that managed to consolidate a solid, wide base of audiences across the nation. In their open air concerts, one finds thousands of fans, particularly young men and women, repeating vehemently after them their theme song Wust Al Balad (vernacular for “downtown”), a self-tribute to the fact that their music has reached everyone, from the intellectual to the man on the street. The band started by playing in pubs like After 8 and then quickly moved to the more inclusive cultural spaces such as Al Sawy Cultural Center. Their streams of income reside primarily in live concerts, be it regular or seasonal performances. Although they recently released their first CD, direct monetary returns is not the strategy that the band is eying right now. “Wust Al Balad seeks to reach the average Egyptian and to touch him or her through music. In seeking that, we care about developing a wide listenership base more than financial returns,” says Hani Adel, the lead vocalist and guitarist of the band. Adel pinpointed the challenges of trying to pursue the traditional way of getting a production company to release an album for them. “Production companies are risk averse when it comes to new music genres or alternative music. They prefer going for conventional Arabic music as a guaranteed and secured income. [Moreover], music production companies can enslave the artist if he/she does not watch out,” says Adel (Adel interview 2007).

Fathi Salama is another success story in the alternative milieu. After a long career as an arranger for pop stars who belong to the mainstream tradition, in 1988 he created his own band, Sharqiyat, where he composes and plays music that does not fit the commercial scene of the pop star. “I made some millionaires, but not myself,” he said in an interview with the Daily Star Egypt (Al-A’sar 2007). He was then put in a dilemma, namely producing music with meaningful content as opposed to making money through the mainstream commercial scene. He lamented how local producers had no interest in content. “Those companies do not want to change, they will only do what they think will sell. They are not open to any different direction” (Salama interview 2007).

The artists’ quotes shed light on the incentive versus access debate. What they seek is recognition and appreciation of their music, rather than monetary incentives. This is reminiscent of the unique qualities of music, which here shows itself not to be a private good that lends itself to the usual market forces and price mechanism. Indeed, on one level, one does not really see a contradiction between the interests of music creators and those of consumers.

True commons for alternative musicians : free music

Besides live performance outlets for alternative musicians, where there is still some form of monetary gains for the artists, there are also venues through which alternative music is provided totally free. This can be considered a genuine manifestation of the commons. A visible example is free street festivals held to promote the bands as well as music that is made available through free CDs.

First, the Save our Souls (SOS) festival (www.sosmusicfestival.com) is a free full-day concert of alternative bands that takes place bimonthly in Cairo and in Alexandria with the sole purpose of promoting the music. The SOS organizers have created a website, which serves as a venue of interactive communication among lovers of alternative music in the country and the region. In line with that regional scope, the organizers have also started to involve alternative bands from Morocco and Lebanon in SOS festivals. They are also exploring means of providing the bands’ music freely and legally downloadable on the Internet to fans of alternative Arab music all over the world (Ousso interview 2007).

The purpose of SOS is to provide bands with access to a large audience and attract the interest of the media and the entertainment industry in general. Although the festival is free, invitations are provided based on answers to a questionnaire posted on the website. This initial screening of the audience is meant to ensure attendance by music lovers and avoid potential party misbehavior, placing high emphasis on quality rather than quantity of attendees (Ousso interview 2007). In some sense, this may reflect the emphasis placed by the organizers on maintaining the reputation of the party and the quality of music rather than on expected profits that would ensue as a result of the promotion of the bands to the largest possible number of people. In general, the SOS model resonates with the nature of alternative music that chose to be accessible to people and hence can only thrive through community support and irrespective of the profit motive as an incentive to music creation.

Another example of the free commons for alternative bands is manifested in the offer of free music CDs. In one case, Rania Shaalan, a singer from the alternative scene, gave away free CDs of her music after her concert. Another initiative was taken by Kawalees Masr (literally meaning Backstage Egypt), where a compilation CD of songs by independent musicians is produced bimonthly and made available to the public for free. The Kawalees Masr team is also involved in preparing an annual festival in Alexandria (Independent Music Festival). It discussed plans to provide Arabic music within social networking sites, a vehicle that would be most suitable for the culture of young people in the region (Samy interview 2007). These initiatives suggest that alternative Egyptian bands are increasingly looking to leverage the marketing potential of giving their music away for free, and might stand to benefit from adoption of Creative Commons licenses.

While not yet widespread in Egypt, the promotion of musicians through free CDs is comparable to the Brazilian story of musicians in the city of Belem, where many alternative musicians are taking advantage of the new digital technologies to cheaply produce CDs (Mizukami and Lemos 2008). These may be sold at concerts, but are also frequently given away for mass copying by black market street vendors. Although the musicians will not directly earn proceeds from these sales, they know that having their music in circulation will boost their popularity and thus result in more invitations to give live performances (Mizukami and Lemos 2008).

The story of Egypt’s alternative musicians shows how alternative bands depend on the live music scene to an even greater extent than the major pop artists; indeed for their livelihood. Alternative music is sometimes offered for free, in an effort to promote the musicians and their bands. The practices adopted by alternative bands represent a de facto commons in the sense that music is experienced and shared as a group activity within social gatherings and personal interaction, with little to do with the profit motive and nothing to do with copyright.

Two stories and illegal music copying

The stories relayed above scan two different models in Egypt’s music business. Cutting across these is a third branch of the industry, namely the world of unauthorized copies of recorded music and illegal Internet downloads. In one instance, there is illegal access through purchasing bootleg cassettes and CDs on the street; in another there is illegal access through Internet downloading and file sharing by the end user. In both models, the customer is reaching for an alternative that is less expensive than the original. And in both models, complaints are voiced on the part of the music labels and business interest groups, while domestic authorities follow an existing but seldom enforced domestic copyright law. Artists also have a voice in the debate.

Conclusion : two verses, a “common” refrain?

While enforcement of copyright on music is weak in Egypt, a vibrant live music scene is thriving outside the IP system, thanks to the culture of wedding performances and live parties. In both the mainstream and alternative music worlds, live performances and not the copyrighted recordings constitute the prime source of musicians’ incomes. From the perspective of musicians and their fans, then, the relevance of copyright becomes questionable. At best, the copyrighted recording becomes a reputation device to promote the musician; a goal served even more efficiently by the free sharing of music, legally or illegally.

For both the popular stars and the alternative musicians, the live music scene offers profitable models of music generation and delivery, flourishing in parallel to an existing but seldom respected or enforced copyright law. This creates a world of de facto commons, wherein the interests of musicians and users are brought closer, without much need for copyright protection. This commons-based approach to music production aligns very well with the nature of music as a quasi-public good, and seems to be a more suitable platform for Egyptian artistic production, which is born to a gift culture that rejoices in sharing and gives little attention to individuality.

The importance of recorded music sales to musician incomes in Egypt has been greatly exaggerated. Both the mainstream and alternative music stories present a scenario whereby direct monetary benefit to the musician out of copyrighted recordings is quite modest. Whether the musician gets a percentage of reported sales or a lump sum, what reaches him or her at the end of the collection chain – given the leakages, the illegal copying and downloading, the decline in music sales, and questionable accounting – ends up as negligible. In this context, copyrighted recording and video clips mainly serve as reputation promoters or marketing devices. The primary source of earnings for musicians is the live performance, which flourishes thanks to the country’s social and cultural heritage.

Whether pop or alternative, the musician will always seek the live performance, through which he or she will receive the direct return on creativity. The social commons acts as a medium of bringing music creators and users together, without much need for the label, nor indeed copyright. Because the livelihood of musicians ultimately depends on the social commons as the means of music production and delivery, it will continue to be secure, regardless of any spread of illegal music copying. In fact, there are strong reasons to believe that a freer trade in recorded music would boost musicians’ incomes. Recorded music whets the public appetite for live performances which, particularly for alternative acts, are the only way for a greater variety of musicians to have a shot at entering the industry.

Only the distributors of copyrighted recorded music stand to lose from this freer trade, because their monopolies over particular artists will disappear. They will be forced to really compete with other distributors. But, this is a loss only from a very narrow perspective. This fuller competition opens up business opportunities for smaller actors, online distributors and street distributors, eliminates the cost to the state of policing illegal copying, enhances consumer access through the lower prices that competition generates, and protects the moral rights of artists to perform and distribute their works wherever they want. From an ethical frame of reference that maximizes benefit to artists and consumers, the choice seems clear.

As such, the de facto commons that emanates from the bottom-up practices of Egypt’s music industry should be embraced as an appropriate solution toward resolving the tension between promoting incentives for music creators and access for music users. This is a more suitable alternative for the country than maximalist copyright protection, which deals with music as a private good and works primarily to the benefit of the record label rather than that of the artists and the users. Egypt should capitalize on and expand models that rely on the social commons and that allow music to be experienced as a social good. The commons-based approach is more in line with the notion that music is a quasi-public good, whose value increases with the number of users.

Embracing a more commons-based approach to music does not mean that there will be no profit-making opportunities for large companies. As described in this chapter, the major Egyptian labels already profit from the distribution of music on a commons-based model, by broadcasting video clips on satellite channels and generating revenue through advertising and SMS contests. Mobile phone companies and Internet service providers also stand to gain from increasing access to free music, which will drive more Egyptians to seek subscriptions. Another suggestion in this regard is an online subscription model that incorporates social networking, virtual gift giving, and holding virtual parties. Such formats would be highly suitable to the Egyptian culture and practices of accessing music.

The live music scene in Egypt offers a special form of the commons. I call it de facto commons because it represents practices that have naturally emanated from the bottom up without any deliberate action or conscious decision on the part of any organizing agency. Considering the earlier analysis of music as a quasi-public good, perhaps what the live scene in Egypt exemplifies is a model of a quasi-commons: to a large extent non-rivalrous, but still excludable. Many are invited to listen, some pay, but prices are significantly more affordable than buying an authorized CD. Not everyone gets in. In most venues, some people are excluded, because there is a shortage of space or because the group needs to charge an entry fee to cover their costs of production.

On a wider scale, music is freely shared and exchanged, sometimes formally in the case of alternative musicians, at other times illegally in the case of unauthorized copied and shared music. Perhaps it is time Egypt’s music scene expanded into a fuller commons accessible to all audiences, including the poor and the geographically marginalized. This fuller commons is realized to the extent that recording technologies make it possible to expand the audience beyond the live one, and copyright barriers to file sharing, radio broadcasting, and CD sales are removed, or ignored, to make the music affordable to a wider audience. Musicians will continue to earn from the live scene, and indeed, many more musicians may become known through the wide and free sharing of music and alternative distribution mechanisms. Enabling aspiring musicians through such venues is an added value from an access to knowledge perspective.

Acknowledging and accommodating the de facto commons in Egypt’s music industry though a more flexible IP regime can ensure that tension between creators and users will be further eased, officially this time, albeit at the expense of the middleman. But that is precisely one characteristic of the digital economy: the shrinkage, or at best evolution, of the role of the middleman in light of the prevalence of the Internet as a medium of bringing producers and consumers closer together. The trade-off between access and incentives will be further resolved, as free access to consumers will act to promote the musicians who will still find space for expanding their earnings from the ever flourishing live scene.

On a final note, the lessons learned from Egypt’s music industry echo other models that create value based on the free sharing of knowledge and that are witnessed in other industries. In the software industry, for example, for-profit business models are built around freely shared open source software. As a knowledge-embedded good, digital music shares its cost structure with software: expensive to produce the first copy, yet inexpensive to reproduce and distribute additional ones. A similar cost structure may exist in the area of pharmaceuticals, where significant research expenses are involved at the early stage, but later manufacture can be achieved at low cost. In such circumstances, resolving the incentives-access trade-off does not require creating an IP monopoly, but rather realizing and taking advantage of the economic virtues of sharing. The common refrain, then, is also heard in the case of other knowledge-embedded goods, where knowledge sharing can be incorporated into business models that generate value for both producers and consumers, offering a more suitable alternative to intellectual property protection.