A music downloads business targeting Middle East consumers has clinched a seven-figure deal with the world's four largest record labels, its founder said yesterday. Hassan Miah, the founder and chief executive of UrFilez, said the company was also in advanced talks with telecommunications operators over launching mobile streaming services across the region.
UrFilez, a privately funded company with offices in Bahrain and New York, said music by artists signed with Sony Music Entertainment, Warner Music Group, Universal Music Group and EMI Music was now available on the site, which would offer access to more than 4 million songs. Mr Miah said the deals amounted in total to a "seven-figure" US dollar sum. "We just closed the deals with the four major record labels, which hold the rights to 60 to 70 per cent of the world's music. We're going from 40,000 songs to over 4 million songs in our library," he said.
UrFilez launched last year but has been relaunched in Bahrain to reflect the international content and a revamped download service offering MP3s free of digital rights management (DRM) restrictions. It will be rolled out to other markets "over the coming months". The company is also offering an unlimited mobile streaming service through the Bahrain telecoms company Batelco. Customers can choose to pay the monthly US$3 (Dh11) subscription charge via their mobile phone account and will not be charged additionally for data transfer. Personalised radio applications are available on BlackBerry, Android and iPhone handsets.
Mr Miah said he was also in talks with other telecoms companies in the Middle East, Asia and Africa over similar mobile streaming services. "We are in fairly advanced talks with others … It's the major telcos in multiple countries. I'd expect to have another announcement hopefully within 60 days," he said. UrFilez would receive only a fraction of the $3 mobile subscription charge, said Mr Miah. "More than 50 per cent goes to the media rights holders - it varies according to the mix. Then the rest is split between the carrier and us - the carrier gets the majority."
Mr Miah said UrFilez "could be breaking even in about two years" and expected exponential growth from a current subscriber base that was in the "mid-thousands". "In three years time I'm hoping to have over 1 million subscribers," he said. "Our user base will be multiple millions of people. We think we can become the market leader in the emerging markets. We have the most complete library and we have the most innovative technology." Last year, 27 per cent of the recorded music industry's global revenues came from digital channels - a market worth an estimated $4.2 billion in trade value, up 12 per cent on 2008, according to the international federation of the phonographic industry's Digital Music Report 2010.
But overall music sales have declined steeply in recent years. Legal music download sites have been slow to take off in the Middle East, where piracy is rife. There is no dedicated iTunes store in the Middle East, although the service is accessible to users with a credit card registered in one of the markets where the Apple service does operate. But contenders such as Nokia's Music Store and Getmo Arabia, a joint venture between Arvato Mobile Middle East and Abu Dhabi Media Company, are active in the market. Another is Music Master, a DRM-free download site set to launch by the end of next month.
Saeed el Ajou, the managing director at Music Master, said all legal music download sites faced a battle against piracy. "We're all fighting the same battle, which is piracy. It comes down to packaging music in an attractive way, which piracy can't do," he said.