Melodies of the MENA: The Changing Landscape of the Music and Live Entertainment Industry in the MENA Region

Melodies of the MENA: The Changing Landscape of the Music and Live Entertainment Industry in the MENA Region

The MENA music industry growth has been a transformative force in shaping the region’s cultural and economic landscape. The year 2023 was a remarkable one for the music and entertainment industry, with revenues reaching US$2.8 trillion. Taylor Swift’s Eras Tour alone grossed an estimated $1.04 billion from 60 shows, according to Pollstar, making it the highest-grossing tour of all time, surpassing Elton John’s Farewell Yellow Brick Road tour. The box office also had a stellar year, with a 30.4% year-on-year increase in revenue. The ‘Barbenheimer’ combo of Oppenheimer and Barbie grossed a total of US$2.4 billion.

Today, the music and entertainment industry in the MENA region is experiencing growth rates that would have been unimaginable just a decade ago. The exciting part? This is just the beginning.

MENA countries, particularly in the GCC, are racing to expand their entertainment industries and live performances to boost tourism. A significant turning point was Saudi Arabia’s policy changes in 2016, when the Saudi government announced its openness to public events and established the General Entertainment Authority. This ambition was further integrated into Saudi Vision 2030, a government program launched in 2016 aiming for a vibrant society, a thriving economy, and an ambitious nation.

Saudi Arabia’s Vision 2030 includes specific support measures and a US$64 billion investment plan to help the entertainment sector contribute more than US$23 billion, or 3% of GDP, by 2030. Meanwhile, the UAE government plans to invest US$6 billion in these industries by 2026, further solidifying the UAE as a global tourism and leisure hub. The Emirates have consolidated their culture and creative industries, placing museums and media sector infrastructure into a single unit under the Department of Culture and Tourism (DCT) Abu Dhabi.

An Outlook on MENA Music Industry Growth and Entertainment

Global Industry Trends and MENA’s Role

In 2023, the entertainment and media (E&M) industry regained stability, achieving a 5% increase in global revenue, reaching US$2.8 trillion. This growth outpaced the general economic expansion, despite challenges such as economic uncertainty and technological changes driven by AI. Over the next five years, the industry is projected to grow at a more moderate CAGR of 3.9%, with total revenues expected to exceed US$3.4 trillion by 2028.

The Booming Music Market in MENA

The global recorded music industry was worth US$28.6 billion in 2023, growing by 10.2% from 2022—the second-highest growth rate on record. The Middle East and North Africa (MENA) region, which was the fastest-growing music market in 2021, achieved the third-highest growth rate in 2022, with a significant increase of 23.8%. Additionally, the MENA region holds the highest global share for music streaming, accounting for 95.5% of all forms of music consumption in the area. This is encouraging news for investors, as MENA region users are among the top globally, averaging 27 hours per week listening to music—6+ hours higher than the global average. They also use more than 10 different methods to engage with music, ranging between several audio and visual platforms.

Investments Driving the Music Industry

Record companies are investing US$7.1 billion annually in Artists and Repertoire (A&R) and marketing, fueling the development of artists and their careers while bringing together fans and music communities worldwide. Breaking an artist into a major market can cost an estimated US$2 million, with record labels taking between 50% and 90% of what an artist or band earns.

Live Music’s Comeback Post-Pandemic

Recovering from its dormant state in 2020 due to the pandemic, live music revenues experienced a 26.0% increase in 2023, reaching US$6.6 billion, making up more than half of the entire music market. Governments and companies in the MENA region are actively working to grow their share of this expanding market.

Shifting Engagement Trends in Music

While it’s commonly said that people “listen” to music, global surveys by IFPI suggest otherwise. The top four ways 16-24-year-olds engage with music daily are through short-form video (82%), audio streaming (72%), video streaming platforms (66%), and radio (48%). Many refer to these trends as “The TikTok Effect,” and the Chinese giant is not unaware of its impact. This year, TikTok announced plans to form an investment team to acquire music content producers and companies.

Growth Prospect—Exciting Times to Come

Growth Prospects for MENA’s Music Industry

The digital recorded music and podcasts revenues in the MENA is growing at almost double the global growth rate. Investors are taking steps to be part of this growth. In 2023, SRMG ventures, the investment arm of the Saudi Research and Media Group, has invested 5M USD in Anghami, the leading music and entertainment streaming platform in the MENA region, to capture a larger share in the fast-growing sector that is forecasted to reach $700mm in 2026.

Princess Haifa bint Mohammed Al Saud, Assistant Minister for Tourism for KSA, stated in 2021 that the Kingdom aims for a staggering 600% increase in live music events in 2022 alone—making music events a key player in Saudi’s greater tourism strategy. As Saudi Arabia aims to increase its tourism contribution to GDP from 3% in 2018 to 10% by 2030, the music and entertainment sectors are focal points for economic growth and development in the Kingdom.

Elsewhere in the GCC, Dubai is working to increase the contribution of creative arts to its GDP from 2.6% in 2020 to 5% by 2025, with plans to launch new creative zones that will increase the number of companies from 8,000 to 15,000 by 2025, enabling great investment opportunities for local and regional investors in the sector of Arts and Music. Cairo, a top creative hub in the region, is also gaining attention from global music and media companies. In October, Universal Music Group (UMG), the world’s leading music company, entered a partnership with Harb Talent Management in Egypt. Together, UMG subsidiary Universal Music MENA and Harb Management will work on local talent discovery, development, music production, marketing and promotion, live events, and brand partnerships.

Major Initiatives and Events Shaping MENA’s Industry

Shortly after KSA established the General Entertainment Authority in 2016, the Kingdom surprised the world with Soundstorm—a mega electronic music festival featuring diverse music genres—hosting over 700,000 attendees in Riyadh.

With the founding of MDLBEAST by the GEA, a new era of music and entertainment has emerged in the Middle East. MDLBEAST operates as a comprehensive content powerhouse within the music industry, encompassing various areas. It includes an online creative community, a record label, talent development platforms, and music festivals in Saudi Arabia that spotlight the country’s dynamic tourism and nightlife culture. From major concerts like Soundstorm and the B2B XP conference to hosting global artists such as Justin Bieber and Eminem, the Saudi government is actively establishing KSA as a hub for live events.

Saudi investments are not limited to Riyadh and Jeddah but extend to several other cities as well. For the past two years, music festivals like Azimuth have been taking place in AlUla, a region that boasts a UNESCO World Heritage site and has been gaining traction globally. With day tickets priced as low as US$890, Azimuth provides its audience access to a global music experience with artists from around the world.

Conclusion

The MENA region’s music and entertainment industry is undergoing a transformative period, marked by rapid growth, significant investments, and ambitious initiatives. With the support of government programs and private investments, countries like Saudi Arabia and the UAE are positioning themselves as key players on the global stage. As these efforts continue, the region is set to become a major hub for music and live entertainment, offering exciting opportunities for artists, fans, and investors alike. The journey is just beginning, and the future promises even greater achievements in the years to come.

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