Muzak and its 110 affiliates serve approximately 60% of U.S. businesses subscribing to background music services. Once the court is notified of the settlement between BMI and Muzak and its affiliates, BMI will present the same terms to all other providers of background music.
"This new pact settles long-standing litigation over the value of our songwriters' and publishers' music," said John Shaker, BMI Senior Vice President, Licensing. "Fortunately we've been able to reach a compromise that both parties can live with."
Tom Annastas, BMI Vice President, General Licensing said, "We believe this five-year agreement with Muzak and its affiliates better compensates copyright owners while providing good value to those businesses that use BMI music. We anticipate that all other providers of background music services will recognize such value and agree to similar terms as well."
While Annastas did not disclose terms of the new agreement, he did say it creates meaningful increases that represent a higher rate for BMI songwriters than was paid by Muzak in the past. The companies have operated under an interim agreement since the expiration of the previous industry-wide pact between commercial music services and BMI.
In October 1997, BMI initiated a rate court proceeding in Federal Court in New York to establish new royalty rates for background music providers that use the music of BMI copyright owners. Other than Muzak, major companies offering background music are Music Choice, PlayNetwork, and DMX Music.