Music rights organisation BMI raises fee share from 10% to 15%

BMI has announced it will be raising the margin of annual collected revenue it retains from 10% to 15%, in a letter from CEO Michael O'Neill.

BMI is one of the world's largest performance rights organisation (PRO) that collects license fees, entitling businesses to play or sync any songs from the organisation's repertoire of over 20 million musical works of more than 1 million copyright owners. Since its foundation in 1939, it operated as a non-profit organisation until October 2022

The organisation's goal will now be to distribute 85% of licensing revenues collected to its songwriters and publishers, with the final 15% going towards covering overheads and allowing BMI to achieve a modest profit margin.

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The increase risks songwriters and publishers leaving if they suffer a negative impact to their earnings, but BMI argues that retaining more profit will enable investments in enhanced services and acquisitions which will ultimately boost their revenues.

Steps have since been made towards that direction, with BMI's partnership with Music Nation, a music rights organisation in the United Arab Emirates, with the aim to increase revenues and mitigate any concerns songwriters have regarding the increase in annual collected revenue retained by BMI.

The transition to a for-profit model last year has opened up various possibilities such as BMI increasing its 15% margin further, with O'Neill refusing to deny this possibility.

In its annual report, released October 12, the BMI president & CEO also disclosed that the music rights organisation is "engaging in discussions with a potential new partner" amid rumours that the PRO will be sold to New Mountain Capital at a $1.7 billion valuation.

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Despite changes made to its business model and margin of annual collected revenue retained, as well as a potential sale, O'Neill has insured affiliates and partners that BMI's "mission remains the same, to serve [its] songwriters, composers and publishers and continue to grow [its] overall distributions."

Read the full update here.

Tibor Heskett is Mixmag's Digital Intern, follow him on Twitter