Friday, March 22, 2013

Beirut Streaming Music Startup Targets Mid East, Africa

Ben Rooney/Wall Street Journal

Where are the next billion internet users going to come from, and what music are they going to listen to?

If Lebanese startup Anghami (it means “my tunes” in Arabic) has its way many of them will be listening to their streaming music service (think Spotify or Deezer but for the Arab region). Launched in November 2012, according to CTO Elie Habib, the company will have one million users by next month, considerably ahead of their planned target of 750,000 by the end of the year.

However, unlike Spoitfy or Deezer which have no free service on mobile devices, Anghami delivers streaming music, mainly Arabic but also some international music, to smartphones, and even not-so-smart phones, for free. It currently has a library of 2.5 million tracks. According to Mr. Habib that will double by May.

While Arabic is one of the top six languages on the internet, Arabic content is hard to find. Not surprisingly it is local tracks that are proving to be the most popular. Of the top 30 songs on the service, 21 are in Arabic, mostly pop, but some more traditional music.

But what Mr. Habib believes will let Anghami steal a march on its rivals is technology it has developed to deliver streaming music over slow connections and to older phones, a technology it believes will help them win market not just in areas of the MENA region with slower networks, but in to Africa. “Delivering music of 4G or even 3G is not very difficult,” he said. “But we can deliver it smoothly and with good quality of EDGE.”

EDGE is an older — sometimes called 2.5G — technology still more common in developing nations than 3G. He would not be drawn on exactly how it works, except to say that the tracks are split into very small packets making it easier to send over slower connections, and then reassembled in the app. “As we are streaming, of course we continue to download the packets as the music is playing.” He said they had worked with Dolby compression that allows streaming at 64 kbps, while still maintaining acceptable audio quality.

Furthermore, while the company has both an iOS and Android app, it also supportsNokia NOK1V.HE -1.29%’s Symbian as well as older BlackBerries. “Nokia is still huge in this area. About half of Jordan’s phones are Nokia.” It will also run on Nokia’s newer Asha range, which is aimed at developing nations.

The company has been very aggressive in its marketing throughout the MENA region. Anghami signed a deal with MBC, one of the regions major broadcast networks, which got it a three-year exclusive deal for local music talent shows.

At the moment, while the company builds its customer base, the service is free for all users, but the plan is for a classic freemium model: an ad-supported free service, and a premium service that allows local downloads.

But a third way users can get music has been developed taking a leaf out of rival Deezer’s books; Anghami signed a deal with Orange in Jordan to provide the service for free to Orange customers in the country. Paris-based Deezer cut a similar deal with Orange in France which resulted in the company getting some 20 million users.

But, says Mr. Habib, neither Spotify nor Deezer are his biggest rivals, nor even is Apple’s iTunes service, which has recently opened up in Lebanon. “We are in a sea of piracy,” he said. “People in the region are not used to paying for music.”

It was this that allowed Anghami to cut deals with both local labels (they have an exclusive with Rotana, one of the biggest local labels) as well as with the big global labels.

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