US-based performance rights organization BMI has reached an agreement in principle to settle its ongoing rate dispute over radio royalties with the RMLC (Radio Music License Committee), which represents more than 10,000 commercial radio stations in the US.
BMI and the RMLC are entering into a new multi-year deal covering the 2017-2021 period.
A release from BMI claimed that “the new license carries a rate that reflects the strength of BMI’s repertoire and its share of radio spins, which is higher than any other Performing Rights Organization”.
In addition to the new agreed-upon rate, which is retroactive to 2017, the RMLC has agreed to a one-time payment to BMI for litigation fees.
The new agreement also clarifies and preserves the platforms that are covered by the scope of the license and associated revenue, including over-the-air broadcasts, as well as the stations’ ‘simulcast’ streaming, podcasts and HD radio.
The final deal implementing the parties’ agreement in principle in a mutually acceptable long-form agreement is subject to the Court’s full approval.
Currently, radio royalty rates achieved by the US’s two biggest performance rights organizations, ASCAP and BMI, are governed by consent decrees, which push any dispute over broadcast payouts to federal rate court proceedings.
The consent decrees were originally intended to stop anti-competitive behavior and have been blamed for unfairly capping the potential radio (and digital radio) royalties achieved by both PROs for their members.
Back in January 2017, BMI filed an action in federal rate court to set interim fees for radio stations represented by the RMLC while the two parties negotiated the terms of the now-agreed five-year deal beginning in 2017.
At the time, the RMLC proposed an interim rate which BMI said was “well below” its previous deal, which BMI suggested was justified “based upon incomplete and incorrect information regarding BMI’s radio performances”.
The RMLC then filed a petition in the federal rate court in May 2018 to resolve the dispute.
At the time, Mike Steinberg, Executive Vice President, Licensing & Creative, BMI, said that “the RMLC is trying to use a below-market rate they negotiated with the only US PRO they were able to come to an agreement with; an agreement based on flawed market share data and one that has since been made irrelevant by newly-agreed to and adjudicated rates in the marketplace”.
In December 2016, ASCAP struck a five year deal with RMLC, which included a royalty hike on the previous agreement between the two parties covering terrestrial, over-the-air broadcasts as well as certain digital transmissions.
In July 2017, private US-based licensing organization SESAC also reached a new agreement with RMLC, which the PRO claimed would result in substantially larger rates for its clients than ASCAP’s equivalent deal.
The RMLC then claimed something of a victory – reducing, it said, the topline rate paid to SESAC and its members by US radio stations by 60%.
SESAC disputed that number – suggesting the real reduction was actually somewhere closer to 50% – but also said its focus was on the bigger picture: creating an adjudicated benchmark at a significant step-up over the rates the RMLC has typically been able to impose on the US industry.
“We’re pleased to reach an agreement with the RMLC that reflects a much more appropriate value for our affiliates’ music.”
Mike O’Neill, BMI
Mike O’Neill (pictured), President & CEO, BMI, said: “We’re pleased to reach an agreement with the RMLC that reflects a much more appropriate value for our affiliates’ music.
“While litigation is sometimes a necessary step, our preference is always to work out an amicable solution with our licensing partners while continually keeping the best interests of our songwriters top of mind.
“BMI looks forward to working with the RMLC to improve transparency in the marketplace and enhance the flow of information between our two organizations.”
“We are happy that our impasse with BMI has reached an amicable conclusion.”
Ed Atsinger, RMLC
Ed Atsinger, Chair of the RMLC, added: “We are happy that our impasse with BMI has reached an amicable conclusion.
“The radio industry believes strongly that songwriters should be compensated fairly, and with BMI’s support, we hope that this deal will assist others in the music licensing community in determining fair rates for everyone on both sides.”Music Business Worldwide