It’s now becoming obvious: performance rights societies are getting forced into less-favorable deals with radio stations. Which means less for member publishers and songwriters.
Which brings us to a long-standing dispute between US-based radio stations and BMI, which oversees performance rights across roughly 7.5 million songs.
After years of back-and-forth, court-structured interim payments, and lots of legal fees, BMI has now forged an agreement with the Radio Music Licensing Committee (RMLC). And, like ASCAP before them, BMI is accepting less. “This agreement allows us to move forward without the cost and uncertain outcome of further litigation,” BMI SVP of Licensing Michael Steinberg offered.
“While fees will be lower than the prior final agreement, the return to a percentage-of-revenue license will allow us to grow BMI revenues as the radio industry rebounds.”
Steinberg is referring to a reversion towards percentage-based royalties, instead of less flexible, per-stream payouts. Which sounds great for BMI (and ASCAP) if radio somehow booms towards a rebound, but not-so-great if revenues idle or head southward. In fact, the RMLC predicts it just chopped $1.2 billion in fees by restructuring deals across both societies. That includes nearly $400 million in savings on the just-structured BMI pact, according to the group.
Specifically, the BMI deal covers the seven-year span of 2010 through 2016, and covers virtually all radio stations across the US. It still requires federal court approval, though given that the deal is acceptable to both sides, that’s probably a given.
This also addresses newer formats, specifically online streaming. At a top level, stations will be required to pay 1.7 percent of gross revenue, minus a 12 percent chunk for HD broadcasts and a 25 percent chunk for digital broadcasts (online, smartphone, whatever). Also in favor of broadcasters, the deal calls for substantial reductions for talk radio programs, as well as a $70.5 million credit against payments made during 2010 and 2011. Which means that most radio stations will enjoy a credit against BMI payments for the rest of this year. –Digital Music News
