Universal Music Group (UMG), the world’s leader in music-based entertainment, has entered into an agreement to acquire Chabaka, MENA’s leading digitally-focused music distribution business that empowers independent artists and labels.
Chabaka offers an array of services encompassing digital distribution, marketing, publishing, as well as label and artist support in the Middle East and North Africa (MENA) realm. Established by brothers Ala’a and Tarek Makki in 2013, Chabaka swiftly positioned itself as the sought-after collaborator for independent music creators. These creators seek a partnership with a proficient team of experts capable of guiding them towards both artistic and commercial achievement in MENA’s vibrant and rapidly evolving music landscape.
At present, Chabaka has formed agreements with more than 150 independent artists and regional labels spanning the entirety of the MENA region. The company’s expansive regional repository of songs and recordings has flourished through a culture of ingenuity and entrepreneurship, fostered by its on-ground presence across numerous countries that collectively cover the entire MENA region.
According to Ala’a Makki, Co-Founder and CEO of Chabaka; “These are inspiring times for the Arab region, which is one of the fastest growing music markets in the world. We are thrilled to announce our partnership with UMG at this junction of our journey. Joining forces with the largest music label in the world coincides with Chabaka’s 10th anniversary and marks an important milestone and a new phase for the company, its artists, and labels. This transaction will bring together UMG’s global presence and expertise with Chabaka’s strong relationships and deep local repertoire. Together with UMG, we will drive the transformation of the regional music industry and take it to new places, while creating new possibilities for local artists.”
Ala’a Makki believes that the Gulf region, Levant, Egypt, and North Africa emerge as some of the most captivating destinations for those interested in the realms of alternative, indie, and underground music. MENA showcased extraordinary growth in revenue, registering a remarkable 34% in 2021 and securing a noteworthy third position with 23.8% in 2022, as per the International Federation of the Phonographic Industry (IFPI), a global representative of the recording industry.
The region’s affinity for streaming is also evident from global industry metrics. For instance, residents of the UAE average 22.5 hours of music listening per week, marking a notable 22% above the global average. The Arab countries house over 480 million Arabic speakers, and with a substantial global Arab diaspora maintaining a profound connection to their origins, this market holds substantial potential for expansion. This potential is further underscored by the fact that the MENA region currently only contributes to a mere 0.4% of the worldwide music revenues.
Tarek Makki, Co-Founder, Chabaka, adds: “The region is at an inflection point, and this acquisition was the natural next step for us, our employees, and artists. A top priority for Chabaka was to select a partner that takes us to new heights while safeguarding our artists’ interests and bringing them new upstreaming opportunities at a global level, and who better to help us achieve that than the world leader in the music entertainment business and a company that deeply values innovation and entrepreneurship. Our shared vision is to continue fostering the incredible talents of this region and expanding their reach to a global audience. With UMG’s global platform, expertise, technology, and network, and Chabaka’s deep-rooted local experience, presence, and innovative strategies for artists’ management and revenue growth, we’re all set to bring an extraordinary and unique offering to the market.”
The acquisition of Chabaka complements UMG’s current service offering and footprint in this fast-growing and dynamic MENA market. It will allow UMG to expand its services and reach within the independent label and artist community.
Following the acquisition, Chabaka will become part of UMG’s Virgin Music Group, working closely with the local Virgin and UMG teams in MENA. As part of the agreement, CEO Ala’a Makki will continue to lead the company and be instrumental in further growing Chabaka’s presence across geographies and business lines, supported by key members of the Chabaka team. Tarek Makki will remain as an advisor while also continuing to lead Concast and Boomerang Studios, the other two companies within CHBK Group, which will rebrand following the acquisition.
Patrick Boulos, CEO, MENA Region, UMG, said: “The MENA region is one of the fastest growing music markets in the world, representing untapped potential and opportunity. Chabaka is a unique collection of visionary leaders, artists, and labels and gives us both scale and opportunity, especially when combined with UMG’s world leading global platform. I am particularly pleased that Ala’a Makki and his team will join us and drive the next chapter of Chabaka’s success as part of the UMG family. The team is completely tuned-in with the independent and indie music scene of the Arab region, from North Africa to the Gulf.”
