In making the announcement, BMI President & CEO Frances W. Preston said: "This decision represents a victory for BMI in establishing the legal principle that the retail value of BMI music to the consumers must be the basis for setting license fees."
Judge Stanton had ruled in July 2001 that fees should be set at 1.75% of Music Choice's gross revenue, ignoring the full retail price paid by the consumer for music services. BMI appealed that decision, and the U.S. Court of Appeals for the Second Circuit agreed with BMI. The appellate court sent the case back to Judge Stanton for further proceedings. The new license fee of 3.75% of Music Choice's gross revenues set by Judge Stanton takes retail value into account.
This is the second ground-breaking BMI license announcement in less than a year. In July 2003, the company announced an unprecedented agreement with the radio industry for both blanket and per program licenses that is, to date, the largest license deal in performing rights history.
The BMI Rate Court was established in 1994 in New York City to provide a means by which BMI and its licensing customers can seek a judicial determination of reasonable license fees in the absence of a negotiated resolution.