The music business is in terrible shape. The music publishing business, however, is doing just fine. The latest evidence: Publishing royalty distributor BMI posted record revenues of $839 million, up 7 per cent from last year.
How can this be? Because the royalty revenues that BMI collects, then distributes to copyright holders, have nothing to do with music sales: Instead BMI tracks the use of music on radio, TV, and venues like bars and concert halls–and collects tiny fees each time a song is played. And while CD sales continue to plummet, the opportunity to hear music only increases each year, via outlets like the Web and satellite radio.
This underscores the value of music publishing units, which in a worst case scenario act as annuities for their owners. It also underscores why music labels are pushing Congress to impose what’s called a “performance royalty” on terrestrial radio broadcasters, forcing them to pay fees to the owner of the particular recording (as opposed to the underlying composition) each time it’s played — as satellite and Internet broadcasters already do. (This royalty payment is distinct from the music publishing royalties, which terrestrial radio stations do pay). The labels are unlikely to win this battle– don’t hold your breath waiting for the federal government to come to the aid of the music business. Release.