Mid East business faces the music (page 1 of 4)

On the first floor of Deira City Centre, the largest shopping mall in the UAE, lies the biggest music store in the Middle East. Sprawling over 2,000 square meters and offering 100,000 titles, this Virgin Megastore is a favorite hangout for Dubai teens, who spend hours sampling the latest releases of their favorite stars.

On a normal day, the store is crowded. On September 26th, it was packed to capacity. Teenaged girls and boys, many carrying autograph books, jostled with each other to get as close as possible to a makeshift dais - and to one of the biggest stars in Arab music: Nawal Zoghby. The Lebanese singer had traveled to Dubai to launch her latest album. And her fans just could not get enough of their idol. For most of them, it was their first personal contact with any pop star, big or small.

In any market around the world, such in-store promotions usually work very well. So you might think that they are a fairly regular event in the Middle East as well. Not so, says Hassen Daher, managing director of Virgin Middle East. "We are starting to push the record companies to do more local promotions. Some are investing in this, with us, to help us to expand our market. But other companies are yet to understand the importance of promotion," he insists. "There is a need to educate them, and that's what we are doing. But, just as important, the more market share we have, the more we can force them to start thinking in a marketing way."

It is not only by educating local record companies about the importance of promoting their albums that Virgin is trying to change the market. Virgin has tried to bring in its Western ideas and strategies in the Middle East, a market that is still highly fragmented. A large percentage of music is still sold in the corner shops or department stores, and the concept of specialized, modern and well-equipped music stores is yet to catch on.

This is exactly what Daher hopes to change. He expects to have six Virgin outlets in the Gulf by the end of 2003, with most of them measuring over 2,500 square meters, similar to those in Europe and the United States. "Everything from the entry of the store and its layout and equipment, right down to the lighting and cash registers, everything is exactly as it is in France," says Daher, who goes on to forecast the death of the small music store as Virgin and its arch-rival, Tower Records, take over the market.

Despite Daher's optimism and his armory of international brands and experience, the Middle East market has proved to be far more challenging than what the Western players expected as they herded into the region over last few years. Today, the world's music majors seem lost. As with many other sectors in the region, Western music companies find themselves confronted with an entirely new marketplace with unique challenges.

Back in 1995, when it opened an office in Dubai, British EMI became the first global music player to establish a local presence in the Middle East. EMI is one of the biggest record companies in the world - like Sony, Warner and other heavyweights, EMI signs up artists, records their music and then distributes it throughout the world. The record companies make their money by getting a fat chunk of global sales, which they share with the retailers like Virgin and, ordinarily, with the artists themselves.

EMI decided to set up offices in the region following the implementation of a then new anti-piracy law in the UAE that provided for stringent actions against pirates.