How We Pay Royalties
Last updated 12.26.2012
- Royalty Introduction
- General Royalty Information
- U.S. Radio Royalties
- U.S. Television Royalties
- International Royalties
- Compulsory License Fees
- Internet Music & Mobile Entertainment
- Commercial Music Services
- Live Concert Royalties
- General Licensing Venues
- Miscellaneous Royalty Rules
- Member Services
- Contact Information
We’ve created this abridged edition of our Royalty Policy Manual (or RPM) to help you better understand how BMI pays royalties. The information contained in this guide provides an overview for the vast majority of our songwriters and composers; however, if you’re a classical composer, a member of a foreign performing right society who licenses his or her musical works through BMI or simply feel you need the most detailed royalty payment information available, you’ll want to refer to the full RPM.
General Royalty Information
Registering Your Songs
Samples, Medleys and Parodies
We’ll register musical works that “sample” other songs as long as everybody who has a piece of the action agrees to their writer or publisher share in the new work. However, these shares can’t add up to more than 100% for the writer’s share or 100% for the publisher’s share. Our standard rates for a song will then apply to the song with the samples. If you’re registering a medley of two or more songs, the same rules apply: Tell us the percentages each writer and publisher get paid and make sure your arithmetic is correct.
If you’re registering a parody (like when your song uses part of another tune to make fun of that tune), permission from the publisher(s) of your target tune is usually needed before you can make money off of your parody. BMI will credit your parody based upon the shares authorized by the publisher of the tune you parody.
Assignment of Works
Publishers may assign a musical work to another BMI publisher so long as the publisher making the transfer doesn’t owe us money, data or anything else. And, any transfer of musical works from one BMI publisher to another because of a sale or merger will be subject to the terms and conditions of the contract of the transferring publisher.
Withdrawal of Works
Any publisher who wants to withdraw any of its songs or other musical works from BMI can do so only within a specific window prior to the end of the current term of its BMI publisher agreement. We’ll honor any timely withdrawal notice, provided the sending publisher doesn’t owe us money, data or anything else. And, BMI will continue to license the shares of any non-withdrawing writers and publishers of that musical work.
Instrumental and Lyric Versions of the Same Work
We can’t tell the difference between instrumental and lyric versions of a musical work unless the versions have different titles. So, if a lyricist is authorized to write words to an instrumental work that’s already been registered, the new lyric version has to have a different title in order for BMI to pay the writer and publisher shares for instrumental-only performances to the writers and publishers of the music and to pay the writer and publisher shares for both the music and lyrics for performances of the lyric version. If the instrumental and lyric versions have the same title, we’ll pay on the shares for the lyric version unless we receive an agreement from all participants on how you want us to pay.
How Royalties Are Divided
Every work registered with us has a writer’s share and a publisher’s share. All of the writers’ shares must add up to 100% and all the publishers’ shares also have to add up to 100%. Yes, that’s right: the shares in every BMI work add up to 200%!
So here are the rules for dividing up the 200% royalty:
- The publishers’ shares can’t be more than 100%.
- If there’s an agreement between the writers and publishers where the writers also get a piece of the publisher’s share, the total shares for the work still can’t be more than 200%
- Where some or all of the publishers’ share hasn’t been assigned, the writers without publishers will also receive the corresponding portion of the publisher’s share.
- If any shares change after the initial registration (like a new publisher gets involved), BMI will credit the new publisher with its share only for performances that happen after we’re told to make the change.
(Example: John and Mary wrote “Their Song” together. John signed a songwriter agreement with Music Publisher. Mary did not. When the work is registered with BMI, John will list his writer share as 50%, Mary will list her writer share as 100% (50% for her co-writer interest and 50% for her unassigned publisher interest) and Music Publisher will list its publisher share as 50% (for the publisher’s interest it obtained from John). If Mary later assigns her publisher interest to the same Music Publisher, Mary will notify BMI, her writer share will be reduced to 50% and Music Publisher will be paid 100% effective in the quarter that BMI received Mary’s notice.)
Arrangements of Public Domain Works
We pay 20% of the standard rate for songs for any copyrighted arrangements of Public Domain (PD) works, except for live classical performances, where no payment is made for these arrangements.
Payment for Uses in Unmonitored Areas
BMI collects license fees from many categories of music users, including hotels, nightclubs, restaurants and stores. Creating individual categories for these “general licensing” uses can be impractical and sometimes we don’t get sufficient data to make a proper distribution. So we sometimes use the fees we collect from “general licensing” venues to increase the royalties we pay out in categories where we do have precise data, like radio and TV.
No payment is currently made for these performances:
- Cue, bridge or background music on radio
- Station IDs or public service announcements in any medium
- Promotional announcements on radio or on local broadcast, cable or satellite TV, except as spelled out below
That said, we may start making payments for these categories in the future.
Royalty Payments/Direct Deposit
BMI encourages its members to sign up for direct deposit of their royalties. If an affiliate has enrolled for direct deposit, quarterly royalties of less than $2.00 will be accumulated and transferred to the specified bank account once the total reaches $2.00. No deposit will be made if the total amount of royalties earned from all sources in any calendar year is less than $2.00.
If you choose to receive your royalties through the mail and the total amount of royalties earned from all sources in any quarterly distribution is less than $250.00, BMI will hold the amount earned in your account until subsequent quarterly earnings in that year bring the total to $250.00 or more, when the accumulated money will be paid. However, in no event will BMI hold any such accumulated royalties beyond the final distribution of the calendar year in which they otherwise would have been paid, provided that the royalties that have accumulated equal at least $25.00. Due to the cost of distributing negligible royalties, if the total amount of royalties earned from all sources in any calendar year is less than $25.00 and you have not enrolled in direct deposit, no payment will be made and no royalty statement will be rendered.
U.S. Radio Royalties
U.S. Radio Feature Performances
We define a “radio feature performance” of a popular song as one that’s at least 60 seconds long and is the only sound broadcast during the performance.
Based on a sampling of licensed stations, we pay on three separate categories of radio feature performances: Commercial Radio, Classical Radio, and College Radio.
We use information provided by the commercial radio stations we license to identify what’s been performed and how often. BMI uses a combination of logs compiled by radio stations over a 3-day period each year, together with data provided by proprietary pattern-recognition technology, which identifies performances from any source containing audio, achieving extraordinary accuracy, even in high-noise environments, after detecting audio for as little as one to two seconds.
Royalty payments are based on the license fees we collect from the actual stations performing a work. So, royalty payments will vary depending upon the amount of license fees we collect and the number of payable performances in any given quarter.
Every work, even those written for films and the theater, may be eligible for up to three different quarterly royalty payment parts. They are called the Current Activity Payment, the Hit Song Bonus and the Standards Bonus.
The Current Activity Payment
All BMI works performed on radio are eligible for a Current Activity Payment. We calculate a unique royalty rate for each work, based upon the license fees that are collected from stations that performed the work, combined with the number of times the work was aired. The majority of the funds available for the quarterly commercial radio royalty payments are used to make the Current Activity Payments.
The Hit Song Bonus
Any work that’s performed more than 95,000 times during a quarter may get a Hit Song Bonus. The more times your song is performed in a quarter, the higher your share of the Hit Song Bonus pool will be.
The Standards Bonus
If you’re lucky enough to be the writer or publisher of a “Standard,” which we define as being performed at least 2.5 million times since its release and at least 15,000 times in a quarter (songs like “You’ve Lost That Loving Feeling” or “Stand By Me”), you’ll get a Standards Bonus. As with the Hit Song Bonus, the more performances your work has, the larger the share of this quarterly bonus pool you’ll get.
We use our own digital tracking technology to identify performances of your songs that aired for less than 60 seconds. We create a separate quarterly royalty pool for these brief uses. They won’t increase your overall feature performances and they’re not eligible for Hit Song or Standards Bonuses.
We have special rules for classical works, which we define as a symphonic, chamber music, solo or other work originally written for classical concert or opera performance. If a local commercial radio feature performance is of a classical work (even if it’s not on a classical station), each performance will be paid at the minimum rate of 32 cents per minute total for all participants.
BMI pays for feature performances of a song on college radio stations at a minimum rate of 6 cents total for all participants.
If the recording of your song is more than 6 minutes long, you get double credit for radio performances! Sorry, this doesn’t apply to classical works. To make sure you get this bonus, please send us a letter with your registration with label copy showing the duration of the work.
U.S. Television Royalties
Types of Uses
BMI pays TV royalties based on a census of music usage from cue sheets sent to us from various sources. Here are the BMI broadcast and cable TV performance categories:
Feature Performances are ones that are the focus of the audience’s attention. They’re noted on the cue sheet for the show as either:
- Visual Vocal (VV) – when a vocalist is on camera singing the song, or
- Visual Instrumental (VI) – when an instrumentalist is on camera performing the song
Background Performances are ones that are used to underscore a scene and set the mood but are not the focus of audience attention. These works are typically cues written for the TV show or film or are pre-recorded works from a music library. They’re usually noted on cue sheets as a background instrumental (or BI) or, if the cues accompanying the action contain audible lyrics, background vocal (or BV) performances.
Theme Performances open or close a TV program. We only give theme credit if the work is used in multiple episodes of the show. Otherwise, works that are performed at the opening or closing of a show are credited as either a feature or background performance.
Logo Performances are musical tags that regularly accompany the visual ID or logo of the show’s production company or distributor.
Paid Programming Performance
Paid Programming Performances are works performed in infomercials. The music is paid at one-third the otherwise applicable rate for TV shows.
Promotional Announcements are works that are used in an announcement that advertises an upcoming show on the same network or station. Right now, we only pay for promos that air on ABC, CBS, Fox, The CW and NBC. Your payment is determined based upon the time of day the promo airs and the rate varies each quarter depending on the number of promos broadcast during that quarter.
Commercial Jingles (Performances as of January 1, 2011)
A commercial jingle is a work (either pre-existing or specifically written for an advertiser) used to advertise on television products and/or services for sale.
BMI pays for all music compositions greater than five seconds for performances of commercial jingles on broadcast and cable networks, and local television in major markets. Payments are calculated based upon the time of day of the performances and the number of commercial jingles aired in a given quarter.
BMI currently licenses only ABC, CBS, NBC and Univision as television networks. This means that it’s the network itself that pays us for music airing during network shows.
Royalties are based upon the license fees we collect from each network. Rates will change each quarter depending upon the amount of the fees allocated, which are determined by using Nielsen data to measure the size of the viewing audience. The rates may be different each quarter based on the total BMI music performances for each quarter’s TV Network royalty payment.
We don’t license other TV “networks,” such as Fox, The CW and Ion, as networks because the license fees for music performances are paid by each local station rather than the “network” and are treated according to our Local Television rules.
Network performances may be eligible for up to three different payment types each quarter. They’re called the Current Activity Payment, the Super Usage Payment and the Theme Music Bonus.
The Current Activity Payment
Current Activity Payments are made for all network performances. We calculate a unique royalty rate for each performance, based on the license fees available for the quarter in combination with the duration of the performance, the weighted royalty value for each usage type and television audience measurement data provided by the Nielson folks for each program aired on that network. So, if your music aired during a network program on Monday, October 11, 2010 at 9:00 p.m., its unique rate is calculated using the data for the audience size for that show. The values for all performances types (theme, feature, background and logo) that were reported to us are weighted by BMI with each type having a unique valuation. Most of the royalty funds to be paid each quarter are used to make Current Activity Payments.
Super Usage Payment
Super Usages are Background Vocals, Visual Instrumentals and Visual Vocals that are uninterrupted for at least 1 minute. The Super Usage Payment is higher than those of a feature performance with duration of less than one minute.
Theme Music Bonus Payment
TV Themes with at least 2,000 network performances in a quarter may receive a Theme Music Bonus Payment. If a particular theme qualifies, all the other theme music associated with that show qualifies, too.
We put aside a portion of the available quarterly royalties from each network to make a Theme Music Bonus pool. Each eligible performance receives a pro-rata share of that bonus pool according to how many performances aired. So, more performances mean a higher Theme Music Bonus.
This is a little complicated, as BMI has two different license types for the more than 1,100 local TV stations we license. The first is a “blanket” license where the station pays a single fee that covers music in all that station’s syndicated and locally-originated programs. The other type is called a “per-program” license. Here, the station pays us only where there’s music in particular shows.
We put the blanket and per-program fees we receive in separate buckets. Royalties for music aired on stations with a blanket license are weighted in order to reflect the license fees paid by a station or group of stations. Royalties from per-program stations are determined in a similar manner but those fees are distributed only to the writers and publishers whose music is used on the programs for which the fees are paid.
We get a census of music use for basic and pay cable networks from cue sheets and other sources. Royalty rates are determined each quarter by applying the amount of license fees collected from each cable network against the performances on that network, using the Local Television rates and methodology as a starting point.
BMI has agreements with performing rights organizations (PROs) throughout the world, which allow those PROs to license your works and collect fees on your behalf when your music is performed outside of the United States. The foreign PROs calculate payments to BMI writers and publishers according to their own payment rules. We then collect the money from the foreign PROs and pay it out quarterly after deducting an administrative fee, which is currently 3.6%.
Compulsory License Fees
Each year, BMI receives royalties from the U.S. Copyright Office for music performed on distant-signal broadcast television stations carried by cable television systems (e.g., superstation WGN-Chicago) and for music performed in broadcast TV programs that are retransmitted by satellite carriers. BMI distributes this money to writers and publishers whose music is in that programming.
Internet Music & Mobile Entertainment
BMI licenses many Internet sites and mobile entertainment providers. As these business models are changing as rapidly as the technology, our methodology for the distribution of fees we collect from these evolving sources is likely to change over time. Moreover, many of these services, unlike radio and TV, are not accustomed to supplying music-use data, so currently we don’t get as much detail on the performances of your music as we do in other areas. We’ll continue to refine our methodology as this source of royalties continues to evolve.
Commercial Music Services
BMI uses a “follow-the-dollar” payment process for commercial music services. Royalties for services like DMX, Muzak, Music Choice and PlayNetwork are calculated using data that each service provides us. Royalties are then paid out to our writers and publishers whose music is used on each service.
Live Concert Royalties
BMI pays separately on the top 300 concert tours and/or concert events/festivals each quarter as determined by an independent source. We get set lists from the acts performing at these events and we then calculate a royalty payment for each work that’s been performed, based on the license fees collected from each tour or event. Since the number of BMI works changes each quarter, the royalty rate will also change.
BMI Live (Small-Venue Performances)
BMI Live allows performing songwriters to input up to six months of their performance data to be considered for payment. Songwriters may input their tour information at their convenience for concerts from the previous six months and receive these royalty payments quarterly. Both headliners and opening acts may input tour information, and the program is open to all BMI songwriters.
We pay royalties for original classical works performed at live classical concerts in the U.S. that are put on by organizations that have BMI classical and symphonic licenses. We pay based on a census of concert programs we receive from the licensed venues. Rates are determined each year based upon the fees received from this source and the total number of BMI works performed.
General Licensing Venues
BMI pays royalties from license fees collected from Aircraft, Sports Leagues and Theme Parks. We create separate databases of performance information for each of these categories. Since the number of performed musical works — as well as the license fees collected — changes each quarter, the royalty rate also changes each quarter for these categories.
Miscellaneous Royalty Rules
Direct Licensing of Works
Writers and publishers retain the right to directly license performances of their works, including granting “source” licenses to production companies. BMI requires you notify us about these licenses in writing within 10 days of when you issue the license or within three months of the performance, whichever comes first. We have to know about the licenses so that you don’t get paid twice.
If you think we’ve made a mistake in the royalties we’ve paid you, you’ve got nine months from the date of the payment to notify our Writer/Publisher Relations department about it in writing. We don’t do adjustments for less than $25 because it costs too much.
Overpayment of Royalties
Sorry, but you’re not allowed to keep the money if we overpay you by mistake. We’ll deduct the overpayment from your account; if you don’t have earnings to cover it, we’ll ask you to write us a check. Sometimes, license fees are paid on an interim basis while BMI and the licensee try to figure out what the actual fee should be. If it turns out that the final, actual fee is lower than the interim fee and we paid you according to the interim fee, we reserve the right to debit your account for the difference. This doesn’t happen very often, but it does happen.
Payment from Another Organization
You’re not allowed to get paid by BMI and another performing rights organization for the same performances. That can happen if you leave BMI and go elsewhere. We hold up your royalties once you tell us you’re leaving so that you’re not double-dipping. You have a year to show us you weren’t and get your money.
Assignments of Royalties
BMI will let you temporarily assign your royalties in certain circumstances, like when somebody lends you money and it’s to be repaid from your BMI royalties. We’ll also let you make a permanent assignment of your BMI royalties to an entity that purchases your royalty income stream. We have specific requirements for these assignments and you’ll need you to fill out forms and provide us with certain documents.
Royalties Withheld Due to Litigation
If BMI gets sued, we may withhold royalties relating to the lawsuit. We’ll also withhold royalties for any work that’s the subject of a lawsuit if we’re sent a court order requiring us to put a hold on payments. You don’t need to provide BMI with a court order to have royalties held if the writers and publishers on the song agree to have a third party get the money and they all sign a letter to us saying that.
Legal Process Administration Charges
Life often brings problems -— like legal proceedings. If BMI has to respond to your tax levy, garnishment, restraining notice, child or spousal support order or divorce decree, you’ll be charged a handling fee, which varies depending upon what we’re required to do, but for most things is $100.
Stop Payments and Re-Issuance of Royalty Checks
Stop-payment requests must be confirmed in writing. And we’ll deduct a $30 administrative fee from the reissued check. However, we can’t stop payment on any royalties that have been directly deposited into an account.
Help us go green. Sign up for direct deposit of your royalty payments and contact your Writer/Publisher Relations representative about paperless, electronic transfer of information related to work registrations, cue sheets and royalty statements. Finally, BMI’s website, bmi.com, has lots of features that keep you posted on music business and legal developments that may affect you. Writers can also access their song catalogues and royalty statements online. Still got questions? Look over the full-length RPM and feel free to contact the friendly folks in Writer/Publisher Relations for more information.
If you have any questions about any of the information in this booklet, please contact the BMI office listed below which covers your state or location of residence or business. A Writer/Publisher Relations executive will be happy to assist you.
3340 Peachtree Rd. NE
Atlanta, GA 30326
84 Harley House
London NW1 5HN England
BMI Los Angeles
8730 Sunset Blvd.
3rd Floor West
Los Angeles, CA 90069
1691 Michigan Ave.
Miami Beach, FL 33139
BMI Miami will gladly assist
our Spanish-speaking affiliates,
10 Music Square E.
Nashville, TN 37203
BMI New York
7 World Trade Center
250 Greenwich Street
New York, NY 10007-0030
District of Columbia