January 2005
Dear Songwriter, Composer & Publisher:
As we enter the new year, the challenge of bringing digital rights to the marketplace becomes a priority not only for BMI, but for the entire industry. Meeting this challenge will require leadership built on mutual respect and a spirit of cooperation amongst all parties. At BMI, we will work diligently to develop a partnership that delivers solutions that make sense for the marketplace, while recognizing the primary contribution of the songwriter, composer and copyright owner.
BMI issued the first license for the digital performance of music over the Internet 10 years ago. Since that time, we have collected over ten million dollars in license fees for digital media, including a multiplicity of uses on the Internet. We have distributed over two million dollars in royalties for ringtones alone over the past two years and the growth in this area is exponential.
Last year, BMI’s digital licensing revenues grew by more than 70%. We have signed marketplace-driven long-term agreements with more than 3,700 outlets for digital music, including more than 200 ringtone and mobile entertainment providers. Each quarter BMI processes hundreds of millions of digital performances and reports Internet and ringtone royalties with transparency to you, our writers and publishers. In this fast-growing marketplace, BMI has become a paradigm of the trusted broker, creating a marketplace with a state-of-the-art management system at a very low administrative cost, and a high level of customer service. Our experience and our success have given us a clear view of the challenges of building the market for digital copyrights.
Recently, there have been several announcements from record companies and music publishers about licensing works in the digital marketplace, especially for mobile technologies such as cell phone ringtones and ringbacks. Mention of the performing right, which provides many of you with the major portion of your income, has been noticeably absent. These announcements raise fundamental questions: Are performing rights included, and if so, how are they valued and how will they be accounted for and paid to you? If the performing right is devalued or negated, then songwriters and composers may find their income reduced, or eliminated, in some of the most important future markets for the use of their works.
At BMI, our priority will be to secure a seat at the digital table for you, the songwriters, composers and publishers we represent.
BMI, Real Networks Set Rhapsody Pact
BMI has signed an agreement with Real Networks covering a number of services, including the popular Rhapsody subscription music service. The BMI agreement licenses Rhapsody for its interactive, on-demand streaming, as well as the Radio Pass online subscription radio service. In 2001, BMI negotiated the first-ever performing rights license for digital subscription music services with Pressplay, which operates today as Napster. The Rhapsody service joins Pressplay, MusicNow and MusicMatch in the rapidly growing subscription music marketplace. Rhapsody and Radio Pass serve more that 625,000 subscribers and offer more than 50,000 albums for on-demand streaming as well as radio-style programming. Royalty payments from these agreements will be made in future distributions as license fees are collected.
Direct License Notification Reminder
Please be reminded that if you directly license to a user or source license to a production company the right to perform one or more works, BMI must be notified in writing within 10 days of the issuance of the license or within three months of the performance, whichever comes first.
New Radio Payment Methodology To Debut in April Distribution
Our next royalty distribution, to be made in April 2005, will be the first to feature our new radio payment methodology. We believe the innovations incorporated in our radio royalty payment system will give all BMI writers, composers and publishers the advantages of the most recent achievements in digital technology and radio airplay measurement. The new system also assures that BMI will be able to continue to create the highest value for your music. Complete details on this methodology, which features the most comprehensive accounting of U.S. radio airplay ever, are available on BMI’s website, bmi.com.
I’d like to remind you that songwriters, composers and individually owned publishers can now update their contact information through bmi.com. Using this feature, part of the array of digital tools BMI offers its affiliates, is quick and easy and insures your statements will reach you in a timely manner. To get started, visit the online services area of bmi.com. Please remember to provide us with your e-mail address.
The letters that you receive with your statements are very important. From time to time I may ask you to help us, and yourselves, with calls to action in the preservation of copyright and other issues that affect each and every one of us. I hope you will come to rely on these letters as a valuable communication tool for our entire community.
Sincerely,
Del Bryant
President
Chief Executive Officer