September 2012
Dear Songwriter, Composer and Publisher:
I am pleased to report that in the midst of one of our most challenging years in recent history, BMI’s revenues for fiscal year 2012 totaled $898.8 million, while royalty distributions topped $749.8 million.
BMI’s overall earnings are down approximately 3 percent from fiscal year 2011, due primarily to our new agreement with the Radio Music Licensing Committee (RMLC) – the association that represents the vast majority of the nation’s radio stations – which instituted a return to a percentage-of-revenue fee structure, lowering BMI licensing fees for radio for 2010 through 2016. The agreement also called for a refund to radio for a certain portion of previously received radio license fees.
As part our ongoing dedication to fiscal responsibility and planning for the future, BMI operates on a generally accepted accounting principles basis (GAAP). To be GAAP compliant, BMI absorbed all of the costs associated with the retroactive radio settlement and new license in its fiscal year 2012, which ended in June. This accounting enables the company to move into fiscal year 2013 unencumbered by financial obligations related to the agreement, ensuring that royalties for your work in the coming years will not be affected. We project a return to revenue and royalty distribution growth over the next year, resuming the previously unbroken 20-year record of year-over-year increases that your incredible creative efforts have made possible.
The impact on total income from the radio settlement was significantly blunted by revenue advances in international, cable networks and digital media. Excluding the impact of the radio settlement, BMI revenues would have increased by 4.1 percent. For the first time, international income accounted for more than a third of BMI’s total revenue, totaling $302 million, up 12 percent from the prior year. General Licensing revenue from physical establishments such as restaurants and nightclubs saw an impressive 8 percent increase to a new high of $108 million. New media and digital revenue reached an all-time high of $35 million, an increase of 27 percent over fiscal year 2011, generating 6 percent of domestic revenue due in large part to the rise in use of music by BMI’s 10,000 digital licensees.
On the digital front over the past several months, BMI’s New Media team has worked diligently to enthusiastically support start-ups and online business innovation while simultaneously securing fair compensation for your work. We recently signed a multi-year license agreement with public media organization CPB, NPR’s digital public radio network and PBS’s digital public broadcast entities. Other key additions to BMI’s growing list of digital licensees include eMusic, a music discovery and subscription service that features curated radio programs for music enthusiasts; MetroSTUDIO, a music and entertainment offering from MetroPCS, the fifth largest mobile telecommunications network in the U.S.; wahwah.fm and Aupeo; emerging artist network RCRD LBL; and social music platform CurrentHipHop.com.
BMI expects to track and pay on the largest musical universe in our history in the coming year. This achievement will be made possible by our technological leadership, recognized recently by our second inclusion in the annual InformationWeek 500 list. For the second consecutive year, BMI made the top 100 and is the highest charting media or entertainment company on the list. The honor acknowledges BMI’s application of cutting-edge technology to our day-to-day business operations in ways that drive more value for your work.
I would like to encourage all of our performing songwriters to participate in BMI Live, another technological innovation that directly benefits you. BMI Live pays royalties to you for your live performances of your original music in bars, clubs, restaurants and other venues. Since its launch, the groundbreaking program has distributed hundreds of thousands of dollars to BMI songwriters and music publishers. Visit www.bmi.com/bmilive to sign up and learn more.
Our online suite of tools continues to grow, and we encourage you to take advantage of the useful menu you can access after logging into your account. For example, signing up for direct deposit is a simple way to ensure faster royalty payments and support our efforts to protect the environment.
Please note that in addition to your regular quarterly royalties, this distribution includes 2011 pay-per-view royalties from DirecTV, Echo Star, Lodgenet, NFL Sunday Ticket, On Command and TVN. Also included are additional 2011 royalties from SiriusXM and the annual National Cable Television Association royalties.
Should you have questions about any of BMI’s royalty policies, please consult our Royalty Policy Manual, contact your BMI Writer/Publisher representative, or send your question via email to royalty@bmi.com.
Our congratulations go to our 2012 Urban Icon Mariah Carey. Kudos also go to Drake, Lil Wayne, Ester Dean, Nicki Minaj, Kane Beatz, Pop Wansel and all of those honored at the BMI Urban Awards, held earlier this month in Beverly Hills.
As fall approaches, I hope you feel reinvigorated and ready to achieve new creative highs in the coming months.
Sincerely,
Del Bryant
President
Chief Executive Officer
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