September 2006
Dear Songwriter, Composer and Publisher:
I am extremely pleased to report that BMI posted revenues of more than $779 million for fiscal year 2005-2006, an increase of 7 percent over the previous year. The revenues resulted in royalties for distribution to our songwriters, composers and publishers of $676 million, an increase of more than 8 percent over last year. These results represent the largest performing right income of any copyright organization in the industry.
Although total license fees from traditional analog media continued to increase, revenues from cable, satellite, the Internet and other digital media surged ahead. Cable revenue grew by $24 million and now represents more than 17 percent of our total. New media revenues grew to more than $16 million, an increase of 35 percent over the prior year. International revenues also hit a new high at $204 million, and general licensing income, from tens of thousands of bars, restaurants, retail and service establishments, increased 12 percent over the prior year to more than $86 million.
I am particularly pleased that our tradition of technology leadership and consistent attention to cost control have permitted us to deliver an ever-larger proportion of our licensing income to you, the songwriters, composers and publishers who provide the world’s most popular music. Operational expenses as a percentage of revenues decreased from 14.2 percent to 13.2 percent, the lowest in BMI’s history.
On the legislative front, an industry consensus has evolved over the past two years, bridging the points of view of different sectors of the music industry and digital licensees, that calls for a new, more streamlined approach to the licensing of digital works for download to consumers in order to build a new marketplace. A bill known as Section 115 Reform Act (SIRA) of 2006 (H.R. 5553) addresses this issue, and while BMI supports the overall approach to reforming Section 115 and although we do not represent the mechanical right, we have been an active participant in these discussions and remain particularly alert to assure that the final draft submitted to congress has language that fully protects our songwriters, composers and publishers.
Please note that this distribution, which you are receiving one month earlier than in past years due to our accelerated distribution schedule, contains annual pay-per-view royalties for DirecTV, DirecTV Sports, Echostar Entertainment, Echostar Sports, In Demand 1, In Demand Sports, Lodgenet, NFL Sunday Ticket, On Command and TVN Action Pay Per View.
Our congratulations go to Mariah Carey, Bigg D, Jim Jonsin, Kanye West, Jazze Pha, Kenneth “Babyface” Edmonds, Antonio “L.A.” Reid, the Warner/Chappell Music Group and all those honored at BMI’s 6th Annual Urban Awards, held last month in New York. Congratulations also to Edward Shearmur, Greg O’Connor and Jim Wise, who were recently honored with Creative Arts Emmys.
Sincerely,
Del Bryant
President
Chief Executive Officer