September 2010
Dear Songwriter, Composer and Publisher:
I am pleased to report that BMI generated more than $917 million in revenues, and royalty distributions of more than $789 million for the 2010 fiscal year ended June 30. Our long-term focus on revenue diversification enabled a $30 million increase in revenues from New Media, cable, and satellite audio and video programming services, which offset a decline in radio and television license fees and adverse movement in foreign exchange rates during the January-June period. These results cap a decade in which BMI’s revenues have increased by 70% and royalty distributions by 75%, while our overhead rate was reduced by almost 15%. It is particularly gratifying to note that this success is a direct result of your creative efforts in building a catalog whose depth, breadth and popularity are unsurpassed in the global marketplace.
On July 26, Judge Louis Stanton, BMI’s rate-court judge to the United States Court of Appeals for the Second Circuit, issued a ruling adverse to BMI and in favor of DMX, a commercial background music service, in a case involving reasonable fees for an “adjustable-fee blanket license.” BMI has filed an appeal of the DMX decision issued by Judge Stanton. The appeal on behalf of our songwriters, composers and music publishers will seek reversal of a court decision that, according to DMX’s outside counsel, will allow DMX to “pay fees approximately 65% lower than those sought by BMI.” We feel strongly that you should not be expected to lose more than half of your income from DMX, nor from the entire commercial background music services industry, based on the court’s erroneous holdings, which substantially reduce the value of your creative efforts. We expect the court to take up the appeal before the end of 2010 and will keep you apprised of developments in this important case.
Please note that your enclosed royalty statement indicates no compensation due you in cases where DMX’s public performances of your musical works were covered by a direct license of which BMI has been made aware. 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. In this case, the line item under DMX will indicate a “0” for performances and royalties. Please note that your affiliation agreement requires you, the writer or publisher, to notify BMI on a timely basis of any direct license(s) you enter into concerning works in the BMI repertoire. We strongly encourage writers or publishers who directly license a work(s) to notify each other of such actions.
In another important development that affects your royalty stream, BMI and the Radio Music License Committee (RMLC) reached an interim fee agreement in the radio industry’s rate-making proceeding that began earlier this year. The interim fee agreement took effect August 1, 2010, and calls for an industry fee reduction from $217 million to $192 million. BMI and the RMLC agreed to these terms in order to expedite court determination of an appropriate final fee retroactive to January 1, 2010.
During January 2010, beginning with performances that took place during the second quarter of 2009, BMI included an allocation for short-duration detections (performances that aired for less than 60 seconds) of your BMI repertoire on your royalty statement. Beginning with performances taking place during the first quarter of 2010, your royalty statement now also includes an allocation for short-duration detections that aired on certain radio per-program stations in addition to those airing on U.S. commercial radio stations monitored by BMI/Landmark Digital Services on a census basis, 24 hours a day, seven days a week. Landmark’s patented algorithm is the only such technology in use today, enabling this unique type of royalty distribution. These performances are detailed under the heading of “U.S. Performances-Other Sources.”
In addition to regular quarterly royalty payments covering the first quarter of 2010, this distribution includes royalty payments for performances at Disney and Dollywood theme parks. BMI will expand the scope of this category of distribution to include additional theme parks in the near future. Annual pay-per-view royalties for Echostar, InDemand, OnCommand, Lodgenet, TVN & NFL Sunday Ticket are also included.
In keeping with our continuing efforts to “go green,” you can now choose to receive your royalty statement electronically and sign up online for direct deposit of your royalties, eliminating paper and securing instant access to both your royalty payments and statements.
Our congratulations go to BMI President’s Award recipient will.i.am; Urban Songwriter of the Year Lil Wayne; apl.de.ap and Taboo, who, along with will.i.am, wrote “Boom Boom Pow,” the Urban Song of the Year; Urban Producer of the Year Polow Da Don; and all those honored at the BMI Urban Awards, held September 10 in Los Angeles.
I hope that the rest and relaxation you enjoyed during the summer will be the source of renewed energy and creativity in the coming months.
Sincerely,
Del Bryant
President
Chief Executive Officer