September 2011
Dear Songwriter, Composer and Publisher:
I am pleased to report that BMI’s revenues for fiscal year 2011 totaled more than $931 million while royalty distributions totaled more than $796 million, both historic highs for the company. BMI’s ability to reliably achieve financial results that run counter to industry trends is a product of the sustained popularity of our repertoire and the company’s constant focus on diversification of our revenue streams.
The global popularity of the BMI repertoire has never been more evident, as our international revenues hit an all-time high of $270 million. BMI’s New Media Licensing also hit an all-time revenue high, growing revenues almost 30 percent to a total of $27 million. It is particularly gratifying to note that these results are an affirmation of the inherent value of your creative efforts, which have helped build a catalog of unsurpassed quality.
BMI continues to operate with an overhead among the lowest of any music rights organization in the world, an achievement made possible by our long-term dedication to technology leadership. Last year, BMI processed almost 100 billion performances thanks to our use of the most advanced technology available.
In keeping with our commitment to fostering a marketplace that rewards innovation and the fair compensation of copyright creators and owners, BMI recently signed license agreements with digital music services Spotify and turntable.fm, who join Sony QRIOCITY, Cricket Wireless Muve music service and many more in the growing roster of more than 9,000 digital properties we currently license.
New Cable Royalty Distribution Methodology
Over the last year, BMI has been working to revise and refine its royalty distribution methodology for cable television networks. We are pleased to announce the results of that work by introducing to you the new methodology, which will take effect beginning with performances on and after October 1, 2011, for which royalties will be distributed in June 2012.
By using state-of-the-art technology combined with performance information from Tribune Media and audience measurement data from Nielsen Media Research, BMI will now more closely align its royalty payments with the value that individual programs bring to the cable television industry. Under the new rules, BMI will calculate a unique set of rates for each program that is based on the program’s value relative to all programs airing on an individual cable channel. Royalty rates will vary from quarter to quarter, depending on the amount of license fees available for distribution and the overall number of BMI performances each quarter.
Under the new BMI Cable Television payment system, performances of music can be eligible for two distinct royalty payment components each quarter:
1) The Current Activity Payment
2) The Super Usage Bonus Payment
The calculation methodology behind each of these payments is described below.
The Current Activity Payment
Music in the BMI repertoire that is performed on cable television networks will be eligible for a Current Activity Payment. Each performance will earn a unique royalty rate based on the duration of the performance, the weighted royalty value for each usage type and cable television audience measurement data provided by Nielsen Media Research for each program aired on a channel. The royalty values for all types of performances (theme, feature, background, and logo) that were reported to BMI on cable television program cue sheets are weighted by BMI, with each type having a unique valuation.
Super Usage Bonus Payment
Certain types of performances of an extended duration may qualify for a Super Usage Payment. Specifically, performances of songs (Background Vocal, Visual Instrumental and Visual Vocal usages) with a continuous duration of one minute or greater will be designated as Super Usages. The royalty rate for these performances will be higher than those with a duration of less than one minute.
Of course, the new methodology is set forth in full detail in our Royalty Policy Manual, which can be found at http://www.bmi.com/royalty and which governs the methodology in full. The latest and most recent information on all BMI royalty payments is always available on BMI’s website, where you will find the full text of “How We Pay Royalties.”
We believe the innovations incorporated into these revisions to our cable television royalty payment system will give all BMI composers, writers and publishers the advantages of the most recent achievements in royalty distribution technology and audience measurement data. The new system also ensures that BMI will be able to continue to create the highest value for your music by offering our licensees a competitive source of music, while offering an unmatched repertoire to the American public.
Should you have questions about these enhancements or any of BMI’s royalty policies, please contact your BMI Writer/Publisher representative, or send your question via email to royalty@bmi.com.
Please note that in addition to your regular quarterly royalties, this distribution includes 2010 pay-per-view royalties from DirecTV, Echo Star, Lodgenet, NFL Sunday Ticket, On Command and TVN. Also included are additional 2010 royalties from SiriusXM and the annual National Cable Television Association royalties, along with DirecTV’s Channel 101 payments covering the period from the fourth quarter of 2006 through the first quarter of 2010.
Our congratulations go to Snoop Dogg, Drake, B.o.B, Lex Luger and all those honored at the BMI Urban Awards, held last month in Hollywood.
Sincerely,
Del Bryant
President
Chief Executive Officer
Enclosure:
