BMI revenues up 5%

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BMI / Broadcast Music Inc.A NY Times story notes that  BMI had $944 million in revenue for the year that ended in June—5% more than it collected the year before, and a new high for the organization, whose 600,000 members include stars like Taylor Swift, Pink and Adam Levine of the band Maroon 5. BMI paid $814 million in royalties, the first time its annual distributions have exceeded $800 million. Since 2003, BMI’s revenue has increased about 50%.


“This was the year we were declared dead by some,” Richard Conlon, BMI SVP,  told the paper, “and we just hit a 74-year high in revenue.”

BMI, which was founded in 1939, collected $57 million in its most recent year from digital services, which include not only Pandora and Spotify but also Hulu, Netflix and other online outlets. As recently as 2009, such services represented just 2 percent of BMI’s domestic revenue, but in its latest fiscal year they were 9 percent.

BMI’s “general licensing” category, which includes live performances as well as the music played in restaurants and other businesses, brought in $116 million, and $297 million more came from international sources. Michael O’Neill, who was named BMI’s CEO this month, said the organization had become leaner through staff reductions and by building a more efficient digital infrastructure to track billions of performances of its songs.

Founded in 1914, ASCAP reported in March that it had $942 million in revenue for 2012, down 4.2%. For the year that ended in June 2012, BMI’s revenue also fell by about 3.5%, to $899 million. In those periods, both organizations — which are nonprofits regulated by federal consent decrees — were hit by a royalty renegotiation with radio broadcasters.

Even as the performing rights organizations have tried to adapt and streamline their operations for the digital age, their future has been cast into doubt. In recent years, some of biggest publishers have withdrawn digital rights to their catalogs from the performing rights organizations, in an effort to control the royalty rates paid by online services like Pandora.

But last week, a federal judge in a case between ASCAP and Pandora ruled that publishers could not keep some rights within ASCAP but withhold others. That decision did not directly affect BMI. Pandora has won a Manhattan federal court decision rejecting efforts by some music publishers to narrow a license that enables the largest U.S. Internet radio service to play their music. U.S. District Judge Denise Cote said an existing antitrust consent decree that requires ASCAP to license its works to Pandora from 2011 to 2015 “unambiguously” covers all its works, even if publishers seek to “withdraw” authority to license to “new media” services.

The decision could strengthen Pandora’s case as it pursues related litigation on what constitutes “reasonable” licensing fees. Cote has scheduled a 12/4 trial on that matter.

See the NY Times story here