US performance rights society BMI has filed an action in Federal Rate Court to set interim fees for stations represented by the Radio Music License Committee.
BMI and RLMC, which represents over 7,000 radio stations in the US, are currently negotiating the renewal of a five-year agreement, which was due to start at the beginning of 2017. The most recent final blanket license between BMI and the RLMC expired on December 31, 2016 and the year started without an agreement in place on interim or final fees, despite a year-long negotiation, which could put at risk radio stations broadcasting BMI's repertoire.
Normally, in such cases, the previous rates keep rolling over, but BMI claims it had to take action after the interim rates proposed by the RLMC appeared to be "well below BMI's previous rates, the effect of which would have a significant impact on the royalties BMI pays to songwriters, composers and music publishers."
According to the filing seen by Music Week, the rate applied to radio station for the use of BMI's repertoire was 1.7% of the station's gross revenues. However, using a calculation system which supposedly reflected BMI market share of radio plays, the RLMC offered an interim rate of 1.4%. In a statement, BMI said it "disagrees fundamentally" with the RLMC's proposal, and is asking for the Court to "maintain its most recent rate while new terms are negotiated."
The RMLC claimed this reduction was appropriate “in light of the RMLC’s understanding of BMI’s market share of public performances on radio relative to ASCAP and the new costs associated with the emergence of Global Music Rights.”
BMI contended that the arrival of boutique performance right society GMR, set up by Irving Azoff, did not affect BMI's market share as much as the RLMC pretended. In the filing, it stated: "It would be unreasonable to reduce the interim rate payable to BMI based on conclusory assertions by the RMLC about market share that are necessarily based on inaccurate information about BMI’s market share and are contrary to BMI’s internal analyses."
In the filing, BMI asked the Disctrict Court in the Southend district of New York to "extend the terms of the previous final agreement between BMI and RMLC Stations," which included a rate of 1.7% of each licensee’s gross revenue, on an interim basis and pending a final agreement.
BMI added that it believed that the market developments "will support a final rate of greater than 1.7% of gross revenue payable to BMI."
Mike Steinberg, Senior Vice President of Licensing for BMI, said, "We attempted to negotiate in good faith with the RMLC for many months, and just before the end of the year, the RMLC presented an interim rate that significantly undervalues the work of BMI’s songwriters. Given the unmatched caliber of BMI's repertoire, our superior market share on radio, and the ever-increasing value that BMI music brings to the radio industry across all its platforms, we believe the RMLC’s proposal falls well short of what is in the best interests of our affiliates.”