Anyone paying even casual attention to the music industry must have noticed the skyrocketing value of song catalogs, which have exploded at such a rate that we’re seeing an average of two or three nine-figure deals per month, with Sting, Neil Diamond and David Bowie’s estate making multi-hundred-million-dollar sales in just the past two months.
Thus, it was just a matter of time before performing rights organizations —an often-overlooked multi-billion dollar business that collects royalties when songs are played everywhere from bars and restaurants to stadiums —got into the game, and BMI, which along with ASCAP is the biggest PRO in the U.S., has enlisted unnamed advisors to assist in exploring opportunities for its members and its business, according to an internal letter obtained by PvNew.
In the letter, BMI president-CEO Mike O’Neill sets the scene described above and writes, “It’s important that we evaluate what this could mean for BMI, both now and into the future. In order to do that, we have hired outside advisors to help us explore strategic opportunities that could further grow the value of our affiliates’ music and our business.”
What those opportunities might be is unclear, and is the objective of the search, he says. “Growth for our songwriters, composers and publishers has always been our top priority, and we’re excited to explore ways to continue that momentum.While it’s too early to speculate on what might happen, we’re looking at all our options as long as they advance this mission.” His letter appears in full below.
Performing rights are one of many income streams that can be on the table in song-catalog deals, but clearly BMI is considering any and all feasible options — and it is well poised to do so. Even amid the pandemic, the organization grew its revenue and distributions to record-setting levels in the 2021 fiscal year. The company reported that it distributed and administered a record $1.335 billion to its songwriters, composers and publishers in fiscal 2021 — its highest distribution ever, up $102 million or 8% over 2020, according to the announcement.
In addition,its total domestic licensing revenue exceeded $1 billion for the first time, driven by strong growth in the digital sector.The company also continued to set revenue records, bringing in $1.409 billion, a 7% increase over 2020.
Smith’s letter is below:
Hi Everyone,
I hope you all had a great week. I’m reaching out today with an important and exciting business update for BMI.
As you are all aware, our industry is changing and growing rapidly, and music has never been more valuable. You’ve all seen the news. There is so much happening in our space, and we are in an unprecedented time full of opportunity. It’s important that we evaluate what this could mean for BMI, both now and into the future.
In order to do that, we have hired outside advisors to help us explore strategic opportunities that could further grow the value of our affiliates’ music and our business.
Growth for our songwriters, composers and publishers has always been our top priority, and we’re excited to explore ways to continue that momentum. While it’s too early to speculate on what might happen, we’re looking at all our options as long as they advance this mission.
As a result of all your hard work, BMI has grown consistently over the last five years, including during the global pandemic. Last year was our most successful ever, and we’re pacing well ahead of that. As such, we are going through this process from a position of strength.
I will keep you posted on any further developments and, as always, want to thank you for your continued dedication and the amazing job each of you do every day, along with the collective team effort we put forward on behalf of our affiliates.
Exciting times!
MON
