BMI, one of the largest performance rights organizations (PRO) globally, stated that it would raise the margin of annual collected revenue retained by the organization from 10% to 15%. The CEO of the organization, Michael O’Neill, sent a letter, indicating the change of action. The organization collects license fees, and it entitles businesses to play or sync any songs from the repertoire of over 20 million musical works of over one million copyright owners. However, the organization operated as a non-profit before October 2022.
The organization will aim to distribute 85% of the licensing revenues collected to publishers and songwriters, with the remaining 15% covering overheads and allowing the organization to achieve a modest profit margin. The increase of the profit margin will enable investments into enhanced services and acquisitions which will boost their revenues. BMI has also entered into a partnership with Music Nation, a music rights organization in the United Arab Emirates, to mitigate any concerns arising from the increase in annual collected revenue retained by BMI.
It is worth noting, however, that the increase in the margin of annual collected revenue retained by the organization risks publishers and songwriters leaving, should it have a negative impact on their earnings. Notwithstanding, the CEO of the organization argues that more profit retention will ultimately lead to the development of the organization.
In the organization’s annual report, released on October 12, the president and CEO of BMI revealed that the organization is holding discussions with a potential new partner, amid rumors that the PRO will be sold to New Mountain Capital at a $1.7 billion valuation. Regardless of the changes made to its business model and revenue retention margin, and even with the potential sale, BMI’s CEO assures partners and affiliates that the organization’s mission will remain the same, which is to serve songwriters, composers, and publishers, and to continue growing overall distributions.
You can read the full update on the BMI website
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