September 2008
Dear Songwriter, Composer and Publisher:
I am extremely pleased to report that BMI earned more than $901 million in revenues for its 2008 fiscal year, marking the first time any copyright organization has topped the $900 million mark for music performance revenues and a 7.2% percent increase from the previous fiscal year. BMI also set a historic high in royalty distributions, and will disperse more than $786 million to our songwriters, composers and music publishers, an 8% percent increase over the prior fiscal year. It is particularly gratifying to note that these financial results are made possible by your creative efforts, which have helped build a catalog of music whose depth, breadth and popularity are unequaled anywhere in the world.
While traditional broadcast radio and television accounted for an impressive $340 million, or about 38% of revenue, our leadership in licensing the explosive growth of music in cable, satellite radio and satellite television brought in revenues of more than $208 million, accounting for more than 23% of our domestic licensing income. New Media revenues increased to a total of $15 million, due in large part to growth in the mobile, social networking and website categories, and we now license more than 6,500 digital media properties, an increase of more than 50% over the prior year. International revenues were also a bright spot, accounting for $238 million, or more than 26% of BMI’s revenues. Growth in revenues from the performance of music in retail and service establishments, including restaurants, bars and the hospitality industry, also increased, totaling $97 million.
Our strategic use of technology, including the development of new and enhanced web-based tools for songwriters, composers, and publishers, allowed us to grow our business while lowering overhead to 11.7%, the lowest in company history.
A detailed report on BMI’s 2008 financial results will be made available next month via a special edition of the eBulletin, our monthly electronic newsletter.
In an important development, BMI and DMX are in the discovery phase of their rate court proceeding to determine reasonable background music service license fees for the period from June 2005 forward. First an interim fee will be established this fall, and then final fees will be determined next year. BMI is seeking a substantial increase over the interim fees paid by DMX, which would bring DMX in line with the final fees paid to BMI by industry leaders Muzak, PlayNetwork, and Music Choice. DMX, in contrast, is seeking a rate based on a 20-year-old license formula that produces very low fees. The case also concerns DMX’s stated goal to directly license the public performing rights in most or all of the music works DMX furnishes to commercial establishments. Your enclosed royalty statement indicates where DMX’s public performances of your musical works were covered by a direct license that BMI has been made aware of. In these cases, the line item under DMX will indicate a zero for performances and royalties due to direct licensing. If your music publisher/administrator directly licensed your public performing right in your musical work, you should look to your publisher for royalties for those performances. You are reminded that your BMI affiliation agreement requires you to notify BMI on a timely basis of any direct license(s) you enter into concerning works in the BMI repertoire.
I am also pleased to note that this distribution includes initial payments from license fees collected from the National Football League and the National Hockey League. When your musical works are used in stadiums during live games, BMI uses performance information provided by these professional sports leagues to make an annual royalty distribution. Since the availability of performance information, as well as the amount of the license fees collected by BMI, varies from year to year, the royalty rate for works performed during these games will likewise vary with each distribution. BMI looks forward to expanding the scope of this royalty distribution as additional performance information becomes available.
Also included are annual pay-per-view royalties for 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 The Jacksons, T-Pain, J.R. Rotem, Kanye West and all those honored at the BMI Urban Awards, held earlier this month in Los Angeles.
I hope the summer months relaxed and revitalized you, and that you reap the rewards of renewed creativity during the fall season.
Sincerely,
Del Bryant
President
Chief Executive Officer