|Al-Ahram Weekly On-line
8 - 14 March 2001
|Published in Cairo by AL-AHRAM established in 1875||Current issue | Previous issue | Site map|
No business like show business
Some time ago, a press campaign led by the weekly magazine Rose El-Youssef targeted the Egyptian Financial Group (EFG)--Hermes and its offspring, the Arab (Holding) Company for Arts and Publishing. Last August, Hermes representatives announced to the press that, over the summer of 2000, the company had successfully acquired the negatives of 800 out of a total 3,200 Egyptian movies made since 1935, along with the exclusive rights to these time-honoured classics. They explained that ownership would be transferred to the then-nascent Arab Company for Arts, newly founded by Hermes in conjunction with a number of Arab businesses.
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At the same time, the takeover of Nahdat Misr -- elsewhere referred to as Renaissance -- the film theatre company which upped Hermes's capital to 27 film theatres in Egypt alone -- contributed to the suspicions of critics. Evidently more controversial than the film acquisitions, though, were the drawn-out, multiple-party takeovers of Arab music companies -- most notably Sawt Al-Fann (Voice of Art), the largest company in the Egyptian music industry. The deals involved securing rights to the work of such industry legends as singer Abdel-Halim Hafez and composer-singer Mohamed Abdel-Wahab. Enraged reporters went on to detail the company's manoeuvres to clinch deals with shareholders, producers and up-and-coming pop stars like Khaled Aggag.
Journalists eager to sensationalise the idea that giant multinationals are buying out Egypt's national heritage invoked Hermes's Western connections (Citibank, for one irrelevant party, owns 20 per cent of EFG), casting suspicious shadows over the Holding Company. Why would a business whose goal is investment and profit choose to buy existing movies, rather than produce new ones, they asked. So long as intellectual rights to the nation's heritage remained in public hands, classic films, songs and books are well protected, they argued. To hand over these rights to the private sector is to abandon them to the whims of business tycoons, endorsing the possibility of a monopoly. Yet in much of this takeover discourse, the notion of a sovereign cultural identity is confused with concepts of planned (as opposed to free-market) economics. Surely it is conceivable that a public-sector monopoly might end up being even more detrimental to arts production.
Among the goals listed in the "Arab Company for Arts and Publishing Preliminary Report" (provided courtesy of Ibrahim El-Moallem) are combating piracy, promoting private-sector trade partnership and bringing about "a radical change in the relations governing the market, in the professional code of conduct it is subject to and in its ability to attract the public."
Filmmaker Dawoud Abdel-Sayed dismissed the controversy as an "issue amounting to a series of press campaigns." And yet, he told Al-Ahram Weekly, "when you read these articles, you understand nothing; neither real questions nor arguments were anywhere in evidence." Prior to the acquisitions, Abdel-Sayed explained, some two-thirds of all Egyptian films were in effect owned by the Radio and Television Union. Sheikh Saleh Kamil (the Saudi businessman of ART satellite television fame) bought one third of this collection, and Hermes bought the rest. "We are entering an age in which large-scale capital is penetrating the whole market, not just the cinema industry. Sainsbury's, for example, is large-scale capital in the arena of groceries. Now everybody agrees that cinema is as much a commercial endeavour as anything else; everybody encourages investment and the flow of capital into the country. What is so shocking about it?" Abdel-Sayed said, insisting that it is not a question of being 'for' or 'against'. The questions must be formulated logically and in context, if they are to solicit sensible answers.
Contrary to the conspiracy-theories dreamt up by the Holding Company's detractors, Abdel-Sayed suggests that the private sector might actually be doing the industry a favour. "What might these dangers be? Monopoly, at the worst. Suppose that they do monopolise the industry, what would that do? Raise the price of the film, increase its financial value? Well, I'm all for that. It is far, far better than what the Egyptian Television had been doing, buying five-year or 10-year rights for LE10,000 or something, when films are paid for per screening all over the world."
Large companies are better equipped than small companies: they can take control of each ring in the chain -- production, distribution and film theatres. Unlike small companies aiming for a single hit, they will each have a production agenda, giving rise to more films, more diversity and better use of the available human resources. They can modernise the studios, bringing in up-to-date equipment; and they can promote films more effectively. "Whether or not you are for or against nationalisation, the public sector did not fulfil these functions," Abdel-Sayed said. "Neither production nor distribution were effective; and you know what became of the film theatres." With the incentive of profit in the works, already the company has produced some 20 films, and the Radio and Television Union is now catching up. "Of the six films on offer this Eid," Abdel-Sayed counted them, "the company and the Union produced three each."
The Ministry of Culture does not see cinema primarily as a cultural endeavour, but as a commercial venture producing a commodity, films. "Current economic policy favours large-scale investment," Abdel-Sayed added, "and it was this that the government wanted when it made it easier for investors to come into the country, buy and sell."
Formally established in November, the new company had already received official backing. In August, Minister of Culture Farouk Hosni made an appearance on Nile TV in which he asserted that, far from being a disaster, the sale of these films would "relieve the state of the burden of storing the negatives," perhaps an oblique reference to (expensive) maintenance programmes the company planned on undertaking, which would protect the negatives from faulty storage, wear and tear. Many films were not initially government-owned and had been painstakingly acquired from families, individuals and minor organisations. The company's preliminary report correspondingly states that "cultural products require resources in order to grow and develop; preserving and protecting them against loss and wasteful use require financial investments and human efforts that are no longer in the nature of the state -- anywhere in the world -- to provide."
As if to the celebrate New Year, the Holding Company issued a press release during Ramadan with which to break "the notorious silence kept by those at the top of this new and unfamiliar body," as Rose El-Youssef put it. The statement followed a visit to the Radio and Television Union's Media Production City by, among others, Holding Company Chairman Ziyad Bahaaeddin (who subsequently resigned from his post as legal advisor to the minister of economy) and actress Is'ad Yunis. (Both hold one per cent of company shares in return for assuming administrative responsibilities.) The company's "delegation" met with Media Production City Director Abdel-Rahman Hafez. They discussed future cooperation with the Union, including the provision of free or reduced-rate copies of films owned by the company after they are repaired in laboratories abroad. The statement listed the company's shareholders and goals, expressing support for anti-monopoly laws and laws ensuring that negatives would not be allowed out of the country except for maintenance purposes. It also declared the company's intention to build a laboratory for local maintenance of films. Yet dissidents still saw these events as a chance to critique the official stance.
"Three major companies will be under the umbrella of the Holding Company," wrote Wael Abdel-Fattah in Akhbar Al-Adab, listing the protagonists of the tightly constructed drama of betrayal he had just set out: "(1) The Arab Company for Visual Media, headed by Alaa El-Khawaga [the Jordanian businessmen whose allegedly "shady dealings" prompted much criticism in the course of the press campaign against Hermes] and his wife, actress Is'ad Yunis; (2) the Arab Company for Sound, headed by Mohsen Gaber; (3) the Arab Company for Publishing, headed by [director of Dar Al-Shurouq and chairman of both the Egyptian and the Arab publishers' union] Ibrahim El-Moallem."
Having merged with the Holding Company, Dar Al-Shurouq bought Internet rights to the repertoire of the Arab diva prima Umm Kulthoum and e-book rights to the complete works of Nobel laureate Naguib Mahfouz. Critics who found the notion of a merger between the Holding Company and Dar Al-Shurouq difficult to accept based their attacks on El-Moallem's association with Hermes -- the primary suspect -- ignoring both his long-standing contribution to Arab publishing and his widely publicised interest in the future of digital publishing, e-books and the Internet.
Publisher Ibrahim El-Moallem, contrary to the implication of Abdel-Fattah's article, was far from reticent -- and certainly more willing to explain his position than EFG and Holding Company officials, who in the last few weeks were either too busy or too reluctant to speak, perhaps partly for fear of starting up a new campaign like Rose El-Youssef's. "What you have to understand is that all that exists so far is the basic framework," El-Moallem told the Weekly. "But as yet there is no Holding Company, not really."
The groundwork plan, as it turns out, provides for five companies or groups. To Abdel-Fattah's list, El-Moallem added two companies still to be set up: a distribution company (that will undertake, among other tasks, to build bookshops) and an Internet and digital content company. "All these companies will form a partnership," he explains, the Arab Company for Arts and Publication. "It is not the other way round: no giant company will buy up the companies making up the Holding Company. On the strength of the existing, profitable companies that participate, rather, one can start to ask investors to enter into the market. This way the Holding Company will turn into a large financial body, enabling these companies to grow."
Cultural activities require funding, El-Moallem notes. "Without such capital, there will be no funding. One must take into account that people will take time to get used to investment in culture, though it must also be said that Egypt's most important exports comprise cultural products; culture is an arena in which Egypt has a relative advantage. So it makes no sense not to invest in culture. To produce, distribute and promote cultural products using the modern media: this is a necessity; and it cannot be done without partnership. Without partnership, the question of intellectual rights cannot be addressed effectively: that is essential for properly evaluating and protecting the product."
On the issue of Internet rights, El-Moallem notes, "Dar Al-Shurouq's Internet acquisitions have nothing to do with the Holding Company now, it's a different concern of mine. I don't know what the future of digital publishing might hold, to be exact. But I can tell you that we are currently working with Microsoft to create the software to be used in the first Arabic e-book, to be published by Dar Al-Shurouq . There is risk, of course, but we try to minimise it. When print press technology took over, 400 years passed before we as Arabs caught up. Now that digital technology is beginning to take over, must we wait another 400 years to participate?"
In the long term, indeed, the company promises much: a cutting-edge, nation-wide chain of bookshops comparable to Waterstone's in Britain, worldwide publicity for, and online sales of, digitally remastered, superior-quality videos and CDs of films and music, a full range of e-books and online content and a better organised, more vital cultural sphere. But the proof being in the usual place, will the pudding be served up in time?
The Cairo Bourse
photo: Khaled El-Fiqi
"We cannot prevent [any potential investor] from buying shares in the company in the future. In fact there is nothing in Egyptian law to stop foreign businessmen from doing so. Yet because of the sensitivities and concerns surrounding the project, and because it relates to national culture and heritage, we made sure no foreign parties would participate in the founding of the company.
"Buying existing negatives can be accomplished faster and is more likely to produce economic benefits for the company. We undertook no feasibility study for Egypt. Since the beginning we targeted the Arab market, which is full of satellite channels, communications and Internet companies. Our goal is to channel the artistic and cultural content that we buy through modern media into as much of this market as possible. If we had to produce films and wait for box-office revenues we would most definitely make a loss. We know that profits will not be made before two years, but this is not a long interim for any such project to start turning a profit."
-- EFG Chairman Mohamed Taymour, to Rose El-Youssef
The wider debateCurrent players in the region's increasingly expeditious business game are internationally connected. And claims of direct foreign (particularly Western) involvement, however groundless, have elicited two sets of contradictory arguments. Anti-globalisation commentators emphasise the "commodification of culture" inherent in the process. Instead of Art, Music and Film, one ends up with a single, all-embracing and ambiguous term, "content." And in the application of this term, the aforementioned institutions are reduced to the status of businesses that produce an undifferentiated commodity with merely financial value. This is seen as an example of an economically powerful minority imposing its (commercial) values over a culturally dispossessed majority.
Proponents of capitalism, by contrast, posit a "logistic corporate revolution" to replace existing bureaucracies in which the production, preservation and distribution of cultural products have proved unsuccessful. Arguments against a purely commercial, profit-driven system that respects no boundaries of national identity and serves to erode cultural specificity are countered with the claim that limited budgets and inefficient administration ultimately pose greater threats to the vitality of cultural life.
At another level, critics have pointed out that privatisation in Egypt has been "a very private business," with the implication that, rather than endorsing the kind of increased competition that would benefit the average consumer by reducing prices and increasing access, the shift to free-market economics created monopolies or at best oligopolies that increasingly control their respective markets. Applied to the realm of culture, in which the imperative to educate the public in literature, art and culture remains a central proposition in both official and independent discourse (the "cultural palaces mentality"), the system proves an impediment. Previously state-owned films that could be broadcast on national television for free, for example, are now in the hands of private companies that might charge more for the right to broadcast them than the national television budget can accommodate. Yet the entering of such products into the business sphere makes them available to a broader network of emergent satellite channels and Internet startups. These imply more choice, more sensitivity to the fluctuating demands of consumers and less official control. Perhaps the takeover-partnership controversy is an instance of (neo-)capitalism in the balance.
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