BMI Again Tops $1 Billion in Collections, Breaks Record for Royalty Distributions
Broadcast Music, Inc. (BMI), of the two leading performance rights organizations in the U.S., collected $1.06 billion during the year ended June 30, a 4.64 percent increase over the $1.013 billion collected the prior year. Of that, BMI distributed $931 million to its member songwriters and publishers, up 6.16 percent from the $877 million paid over the year ended June 30, 2015.
While BMI president and CEO Mike O'Neill says in a statement he is pleased with the fiscal gains, he adds that "the ability to provide our songwriters, composers and publishers with our largest royalty distributions to date proves that the current marketplace is working efficiently, a fact the DoJ has undermined with its recent interpretation of our consent decree."
O'Neill is referencing a recent decision made by the Dept. of Justice that allows a songwriter to license their work, regardless of whether they were its only author or were part of a team. Performance rights organizations like BMI and publishers are vehemently against the rule change, an argument which O'Neill lays out in his statement.
"We're eager to build on this [financial] success and continue to ensure that all of our music creators are fairly paid for their work and that licensees maintain full access to BMI's repertoire of nearly 12 million songs," O'Neill continues. "As of now, the DoJ's interpretation will disrupt these efforts, stifle creative freedom for songwriters, limit choices for music users and bog down the marketplace. We are determined not to let that happen."
BMI has filed a lawsuit challenging the DoJ's decision.
Getting back to its fiscal results, BMI says domestic licensees paid in $784 million, with $276 million coming from foreign receipts, a drop of 5.48 percent from the $292 million brought in from outside the U.S. in 2015. Foreign receipts appear to have peaked in 2014, when that revenue stream brought in $307 million.
"That goes to the strength of the dollar against the falling pound and euro," O'Neill explains. "Currency exchanges took about $30 million out of the revenue stream [in the recently complete year versus the prior year], but about half of that, or $15 million, was offset by growth."
Considering how much BMI paid out in distributions, it suggests the organization’s expenses were about $129 million for the year, or 12.17 percent of revenue, down from 13 percent.
"What's great is we are budgeting for increases in every category, except expenses," O'Neill tells Billboard. "This is an efficient market."
Domestically, BMI said $492 million in payments to the organization came from television, cable and radio; $152 million from digital licensees; and $140 million from general licensing. While the first and last category are only up slightly from the prior year's performance, BMI's digital revenue grew nearly 51 percent, from $100.7 million. Moreover, BMI says it processed more than one trillion transactions during the year, that's double from two years ago in the period ended June 30, 2014.
"We believe we can handle a trillion transactions more efficiently than anyone," O'Neill says.
BMI represents 750,000 songwriters and music publishers, with nearly 12 million musical works. "Our job is to put money back in the songwriters pocket and I think we do a great job of that," he says.