ANNUAL REVIEW

2014-2015

ANNUAL REVIEW

Carrie Underwood. BMI Writer Since 2005.

Our commitment

to songwriters and

composers – from

living legends to

rising stars – endures.

We value you, your

music, your rights.

valuing music since 1939.

TABLE OF CONTENTS

PRESIDENT &

CEO’S REPORT

ROSTER &

REPERTOIRE

PROTECTING

REVENUE

& ROYALTY

DISTRIBUTION

TECHNOLOGY

am thrilled to share this report which

provides the details of BMI’s record-

setting performance for the ﬁscal year

ended June 30, 2015. BMI reported

unprecedented revenues of $1.013 billion,

an increase of $36 million or 3.7% over

the prior year. This represents the highest

revenues in the Company’s history and the

most public performance revenue generated

for songwriters, composers and publishers

by any music rights organization in the world.

These results are even more impressive when

factoring in that the Company had to overcome

a $28 million negative impact to foreign

revenues caused by the strengthening dollar.

BMI distributed and administered a record-

breaking high of $877 million in royalties to

its songwriters, composers and publishers, a

nearly 4.5% increase over last year.

BMI’s continuous drive to diversify revenue

streams led to several new benchmarks this

year. For the ﬁrst time in the history of a

U.S. performing rights organization, revenue

from digital sources, including Amazon, Hulu,

Netﬂix, Pandora, Spotify and YouTube, among

others, exceeded $100 million, up 65%

over last year. For the second consecutive

year, cable and satellite-delivered entertainment represented the single

largest source of domestic and international revenue, underscoring the

signiﬁcance of BMI’s growing audio-visual portfolio. General Licensing

also posted considerable gains, and the steady growth from this revenue

stream remains a key differentiator in BMI’s ongoing success. Due to

economic headwinds overseas, which resulted in a lower foreign exchange

rate, international revenues declined 5% compared to last year, but the

extraordinary strength of the BMI repertoire resulted in a solid showing

of $292 million.

The Company’s exceptionally strong performance is a direct result of the

creativity and global popularity of the songwriters and composers that

BMI represents. BMI luminaries continued to dominate the charts this year,

with Taylor Swift, Avicii, Ed Sheeran (PRS), Luke Bryan, Prince Royce and

Lil Wayne contributing some of the most-performed songs of the year.

Electrifying acts including Maroon 5, Foo Fighters and One Direction

continued to entertain audiences around the world. In ﬁlm and television

music, BMI’s outstanding composers contributed themes or scores for more

than 80% of all primetime network TV shows and thrilled movie audiences in

PRESIDENT

& CEO’S REPORT

$1 B

50 M

00 M

50 M

TOTAL REVENUE ROYALTY DISTRIBUTION

2011 2012 2013 2014 2015

TOTAL REVENUE &

ROYALTY DISTRIBUTION

PRESIDENT

& CEO’S REPORT

several of the year’s top blockbusters and acclaimed productions, including

Avengers: Age of Ultron, Furious 7, American Sniper, Transformers: Age of

Extinction, Guardians of the Galaxy,

Hunger Games: Mockingjay – Part 1

and

The Grand Budapest Hotel,

among others.

Throughout the year, the streaming revolution continued to impact the

industry. BMI processed 600 billion copyright transactions, more than

500 billion of which were digital performances, an increase of over 25%

compared to last year. These ﬁgures not only highlight the scope, ability,

accuracy and efﬁciency of BMI’s operations engine, but also demonstrate

the vigorous growth of content distribution via streaming and the extremely

heavy reliance on the 10.5 million works within BMI’s repertoire. The trend

toward digital content highlighted the need for music licensing reform to

better serve songwriters, composers, publishers and music users in the

modern marketplace. While digital companies continue to grow their stock

value and bottom lines through their exponential increase in the use of

music, outdated rules that prohibit free-market rates remain, preventing

creators and copyright owners from seeing comparable growth in the value

of their work. In response, BMI has been steadfast in our commitment

to secure full and fair value for the use of songwriters’, composers’ and

publishers’ creative work in the digital space, and we made great strides

this year with success in the Pandora rate-setting proceedings.

After a lengthy legal battle over the value of the BMI repertoire to the

digital music giant, the Court concluded that BMI’s proposed rate of 2.5%

was reasonable and more appropriate than Pandora’s signiﬁcantly lower

proposal. The Court took into account industry deals made in the free

market and determined that these were “the best benchmarks because

they are the most recent indices of competitive market rates,” a factor that

will have signiﬁcant impact in future rate court actions. The decision also

sets the stage for differentiating Internet and digital licenses from traditional

media licenses going forward.

On the public policy front, BMI was actively engaged in various initiatives on

Capitol Hill this year, urging copyright and regulatory reform to modernize

the rules that govern BMI’s business operations. We continued to have

productive conversations with the U.S. Department of Justice with regards

to modifying BMI’s decades-old consent decree and have seen promising

Congressional interest to that end. Multiple BMI songwriters shared with

lawmakers their struggles as, essentially, small business owners trying to

earn a living in the digital age. In certain cases, it can take one million spins

on a digital service for a songwriter to break $100. We remain optimistic

that these poignant accounts, along with increased attention from Capitol

SENIOR MANAGEMENT

BRUCE A. ESWORTHY

SENIOR VICE PRESIDENT

FINANCE & ADMINISTRATION,

CHIEF FINANCIAL OFFICER

PHILLIP R. GRAHAM

SENIOR VICE PRESIDENT

WRITER/PUBLISHER RELATIONS

STUART ROSEN

SENIOR VICE PRESIDENT &

GENERAL COUNSEL

ALISON SMITH

SENIOR VICE PRESIDENT

OPERATIONS, DISTRIBUTION

& ADMINISTRATION SERVICES

RON SOLLEVELD

SENIOR VICE PRESIDENT

INTERNATIONAL

MICHAEL G. STEINBERG

SENIOR VICE PRESIDENT

LICENSING

ANN SWEENEY

SENIOR VICE PRESIDENT

GLOBAL POLICY

Hill and the industry, will drive momentum toward copyright and consent

decree reform to modernize the music licensing system to better serve all

stakeholders. Our “Protecting Copyright” section of this report contains

additional important detail on all of this activity.

I would like to thank the BMI Board of Directors, the Senior Management

team and all of our team members for their exceptional work this year.

BMI’s record-setting performance demonstrates the value of our service

to songwriters, composers, publishers and licensees alike, and, as we

move forward, our resolve to meet the evolving needs of the marketplace

is stronger than ever. The many efforts that contributed to this historic year

reﬂect BMI’s continuous investment in our future, and we anticipate great

reward ahead.

I invite you to read the report that follows. It provides a detailed overview

of BMI’s business operations during the past ﬁscal year, as well as a look

towards a new era of music rights management.

Sincerely,

PRESIDENT

& CEO’S REPORT

uring a dynamic year in the industry,

the shift from music ownership via

downloads and CD sales to music

access via streaming resulted in a

renewed focus on the increasing value of the

public performing right. As BMI continued its

ongoing efforts to secure fair compensation

for the use of creators’ and copyright owners’

work across all platforms, BMI songwriters,

composers and publishers took creativity to

new heights, delivering a record-breaking year

of in-demand, innovative and inﬂuential music.

From global megastars to rising hitmakers to

legendary icons, BMI’s roster of exceptional

talent emphasizes the Company’s role as home

to the most artistically vibrant and commercially

successful repertoire in the world.

BMI powerhouses including Taylor Swift,

Avicii, Ed Sheeran (PRS), Luke Bryan, John

Legend, Future and Juanes wrote some of

the most-performed songs of the year, while

electrifying acts such as Maroon 5, Foo

Fighters, Little Big Town and One Direction

topped the charts. Brilliant BMI composers

created the music for many of the year’s most

acclaimed ﬁlms and television series, including

Brian Tyler, Joseph DeBeasi, James Newton

Howard and Mark Isham. BMI welcomed

many talented writers to its creative family

this year, including British sensation Sam

Smith (PRS) and soulful chart-topper Hozier.

Exciting voices to watch include Taylor Berrett,

Tiffany Gia, Grace Sewell, Justine Skye,

Diana Fuentes, Soﬁa Carson, Haley Georgia,

Tucker Beathard, Rachel Platten, Shawn

Mendes, Banks, X Ambassadors, BORNS,

Charlie Puth, and composers Fil Eisler and Rob

Simonsen, all of whom create groundbreaking

music that deﬁnes them as emerging new

leaders in the industry.

ROSTER & REPERTOIRE

INDUSTRY AWARDS

BMI songwriters and composers took home the majority of the industry’s

most distinguished awards this year. Prestigious GRAMMY

wins included

multiple trophies for Sam Smith (PRS), who swept Record of the Year, Song

of the Year and Best New Artist; as well as Rosanne Cash, Jack White

and Eminem. Other BMI afﬁliates who earned GRAMMY

gold included

Lady Gaga, Carrie Underwood, The Band Perry, Miranda Lambert, and

Kristen Anderson-Lopez and Robert Lopez. Composer Alexandre Desplat

(SACEM) won the Academy Award for Best Original Score for

The Grand

Budapest Hotel,

while John Legend and Common took the Oscar for Best

Original Song for “Glory” from

Selma

. BMI songwriters were also honored

with 77% of the Country Music Association (CMA) Awards. Additionally,

the majority of honorees inducted into the Songwriters Hall of Fame this

year were BMI afﬁliates, as were all the composers named 2015 Jazz

Masters by the National Endowment for the Arts.

COMMON AND JOHN LEGEND TOOK HOME THE OSCAR FOR BEST ORIGINAL SONG FOR “GLORY” FROM

SELMA

SAM SMITH SWEPT MULTIPLE GRAMMY

AWARDS.

ALEXANDRE DESPLAT WON THE ACADEMY

AWARD FOR BEST ORIGINAL SCORE FOR

THE

GRAND BUDAPEST HOTEL.

FILM & TELEVISION HIGHLIGHTS

For the second consecutive year, cable and satellite-delivered

entertainment proved to be the single greatest contributor to BMI’s

domestic revenue. The music created by BMI’s family of illustrious

composers was featured in many of the year’s blockbuster ﬁlms and

most popular television series, serving to strengthen BMI’s market share

of audio-visual revenue streams.

BMI composers scored four out of the top ﬁve ﬁlms released this year. The

total from such box-ofﬁce hits as

Avengers: Age of Ultron

(Brian Tyler),

Furious 7

(Brian Tyler),

American Sniper

(Joseph DeBeasi),

The Hunger

Games: Mockingjay – Part 1

(James Newton Howard) and

Guardians of

the Galaxy

(Tyler Bates) accounted for over $1.8 billion dollars in ticket

sales alone.

On the small screen, over 80% of this season’s primetime network TV

shows featured themes and/or scores written by BMI composers. Hits

included

NCIS: New Orleans

(Brian Kirk, John Lee Hooker),

Madam

Secretary

(Mike Fratantuno, Terence Yoshiaki),

Empire

(Fil Eisler, Jim

Beanz),

Scorpion

(Tony Morales, Brian Tyler) and

CSI: Cyber

(Ben Decter),

all building on BMI’s track record of success in this space.

INDUSTRY TRENDS

BMI’s role as an early career counselor and supporter has grown

increasingly more important in the transforming music landscape. This year

BMI augmented its function as a creative partner to songwriters and music

publishers, providing an array of networking and career opportunities for

creators and directing promising writing talent to publishers. As a result,

ROSTER & REPERTOIRE

PRESIDENT’S AWARD HONOREE CHRIS ‘LUDACRIS’ BRIDGES PERFORMS

ONSTAGE AT THE 2014 BMI R&B/HIP-HOP AWARDS.

2015 BMI FILM & TELEVISION AWARD RECIPIENTS.

PRESIDENT’S AWARD HONOREE P!NK PERFORMS ONSTAGE AT THE 2015

BMI POP AWARDS.

7ROSTER & REPERTOIRE

BMI bolstered its unique position as a vital early ally in building music

careers and identifying the next generation of hitmakers.

Social media continued to resonate as a powerful tool within the music

industry, with a dramatic cascade of effects: Creators used social media

to connect with fans and build awareness of their projects, while listeners

proliﬁcally shared their music preferences on social channels. BMI

afﬁliates once again seized the opportunities social media presents, with

explosive results. R&B songstress Rihanna recently took to Instagram to

promote her new music, garnering nearly 1.2 million Instagram likes to

date with just four posts. And it’s not only established hitmakers who are

beneﬁting from social media. With a new LP that recently hit #2 on the

Billboard charts, indie-pop singer-songwriter Halsey’s star is rapidly rising,

thanks in large part to social media. To date, she has already amassed

close to 950,000 followers across Facebook, Twitter and Instagram, an

impressive presence that has helped jumpstart her career. Halsey has

appeared on Billboard’s Twitter Top Tracks chart and Twitter Emerging

Artists chart, described as a compilation of “the most shared songs from

up-and-coming artists on Twitter over the last 24 hours.”

BMI continued to leverage social media as a

strategic means of communication with our

actively engaged creative community. Our social

media presence and reach expanded this year,

particularly on Instagram, up 94% since last

year, and YouTube, which saw a 48% increase

in views, due in part to several exclusive video

projects featuring BMI afﬁliates Martina McBride,

Robert Lopez and Kristen Anderson-Lopez, and

Alexandre Desplat.

This year megastar Taylor Swift (who joined BMI

at the dawn of her career at age 15) spoke out

on behalf of all songwriters struggling in the

digital environment. In November of 2014, Swift

removed her catalog from Spotify, stating that

the service doesn’t fairly compensate those

involved in the making of music, and that she

“does not agree with perpetuating the perception

that music has no value and should be free.” In

June, Apple launched its new streaming service,

Apple Music, with a free, three-month trial period during which it would not

pay out royalties to writers, producers or artists. Swift took to Tumblr and

SONG OF THE YEAR AWARD HONOREE NILE RODGERS AND BMI ICON SIR

TIM RICE AT THE 2014 BMI LONDON AWARDS.

BMI ICON VINCE GILL, SONGWRITER KETCH SECOR AND SONGWRITER OF THE

YEAR RHETT AKINS AT THE BMI 2014 COUNTRY AWARDS.

BMI

SOCIAL

MEDIA

GROWTH

BMI ICON SERGIO GEORGE AT THE 2015 BMI LATIN AWARDS.

8 ROSTER & REPERTOIRE

once again spoke out on behalf of creators in an open letter to Apple. She

declared she would hold back her album

1989

from the service, saying

it was unfair that those who create music were being asked to work for

nothing and asked Apple to change its policy. Within 24 hours, Apple

reversed course, ﬁttingly replying to Swift via Twitter, and agreeing to pay

out royalties. This result shows both the inﬂuence of social media and the

inﬂuence that Swift wields in the industry.

CAREER SUPPORT & OPPORTUNITIES

BMI continued its longstanding tradition of bringing the creative community

together with industry decision makers. This year we featured new talent

on stages at premier festivals including Lollapalooza, South by Southwest,

the Sundance Film Festival, Austin City Limits and the CMA Music Festival,

among others. BMI also orchestrated seminars and workshops to educate

and inspire the next generation of songwriters, while providing beneﬁcial

career advice. Events included the annual Sundance Composer’s Lab

Workshop, informative Gamechangers Music Seminar, and the BMI

mentor program for USC’s Thornton School of Music Undergraduate

Popular Music Degree program, among many others.

BMI also facilitated several fruitful songwriting camps this year, including

the Aspen Songwriting Retreat held at the home of songwriter Denise

Rich in September of 2014. This camp resulted in the current song “Daisy”

and upcoming tracks to be recorded by Britney Spears and Ariana Grande.

Other songwriting camps during the year included the BMI and Warner/

Chappell Fontanel Winter Retreat, and the Write On! Song Camp, also in

partnership with Warner/Chappell Music, all opportunities for writers to

cultivate new collaborations, hone their skills and create new songs.

INTERNATIONAL

Although ﬁnancial conditions abroad were unfavorable this year, the

unmatched popularity of the BMI repertoire generated massive

performances around the globe. Dynamic creators such as Lady Gaga,

Taylor Swift, P!nk, Will.i.am and RedOne were among the stellar BMI

songwriters who contributed some of the most popular international hits.

Other active songs on the global charts included the ubiquitous “Uptown

Funk,” “Maps,” “All of Me,” and “See You Again.”

On the big screen, exciting music by BMI composers including Brian

Tyler, John Williams, Danny Elfman, Alan Silvestri, Thomas Newman and

Steve Jablonsky drew audiences to movie theaters around the world. Hit

television shows, such as

Person of Interest, Mentalist

and

Sportscenter,

among others, featured music by BMI composers

that enriched the global viewing experience. Notably,

the body of work from BMI composers has longevity

beyond cinema or television series with repeated

performances on worldwide digital audio-visual

services, such as Netﬂix, HBO GO and Amazon

Instant Video, plus cable and satellite broadcasts.

BMI’s classic catalog also maintained its strong

performance, with enduring songs by Michael

Jackson, John Fogerty and Paul Simon remaining

on some of the most-performed international

playlists of the past year. Other timeless BMI jewels

such as “It’s a Small World” and “Daydream Believer”

delighted crowds far and wide.

BMI’s extraordinarily talented roster of songwriters,

composers and publishers continues to deliver the

industry’s most acclaimed and proﬁtable music

across all genres and around the globe.

BMI LATIN SONGWRITER OF THE YEAR HORACIO PALENCIA.

he music industry’s continued

digital transformation has given

rise to a new era in advocacy and

rights management, and, as a result,

of legal and policy discussions. Throughout the

year, BMI was deeply engaged in its ongoing

efforts in Washington, D.C. to modernize

the rules governing our business, update

for the use of music creators’ and copyright

owners’ work in today’s marketplace.

BMI Senior Vice President of Global Policy,

Ann Sweeney, whose newly created position

focuses on the Company’s advocacy initiatives,

led the charge on Capitol Hill. On another

front, BMI Senior Vice President and General

Counsel Stuart Rosen led the BMI Legal team

to victory in the Pandora rate-court litigation,

marking a critical step forward in realizing fair

compensation for songwriters and publishers

in the digital age. Several other strides were

made this year on the legislative front, as BMI

continued its leadership role in the public policy

arena surrounding copyright reform.

VICTORY AGAINST PANDORA

After a two-year legal battle over the value

of the BMI repertoire to Pandora, in May,

BMI prevailed on all issues in the Company’s

rate-setting proceedings against the digital

music giant. The ruling concluded that BMI’s

proposed rate of 2.5% was reasonable; in

fact, was on the low side of reasonable. The

Court took into account recent industry deals

made in the free market and determined that

BMI’s rate proposal was a more appropriate

reﬂection of the value of BMI music than

Pandora’s signiﬁcantly lower proposal. The

ruling stated that these direct licenses “are the

best benchmarks because they are the most

recent indices of competitive market rates.”

PROTECTING COPYRIGHT

This is a key factor for BMI, and the industry, one that will have a far-reaching

impact in future rate court actions. In addition, the Court ruled in BMI’s

favor for a four-year license term (two years retroactive and two years

going forward), which will allow both parties the opportunity to reevaluate

the licensing relationship sooner, a critical win for BMI given the rapidly-

changing nature of the online music industry. Pandora was seeking a

longer-term agreement. The decision also sets the stage for differentiating

Internet and digital licenses from traditional media licenses going forward.

In July of 2015, the rate court rejected a motion by Pandora to re-open

the ruling. Pandora argued that its purchase of a South Dakota terrestrial

radio station should entitle the digital service to the Radio Music License

Committee rate of 1.7%. While the Court struck down the motion without

explanation, it is worth noting that Pandora recently stated that it has more

than 250 million users, including 79.2 million “active” users, who listen to

1.77 billion hours of music each month - data that takes the streaming

service far beyond the realm of traditional radio music usage. The Court’s

ruling was consistent with its ﬁnding at trial that Pandora’s business and

music use was not comparable to terrestrial radio’s.

Pandora has ﬁled its appeal of the decision, and BMI is well prepared to

defend this matter in the Court of Appeals for the Second Circuit.

BMI SONGWRITER AND NSAI PRESIDENT LEE THOMAS MILLER TESTIFIES AT THE SENATE HEARING

“HOW MUCH FOR A SONG?”

10 PROTECTING COPYRIGHT

CONSENT DECREE REVIEW

As noted in last year’s Annual Report, in August of 2014

BMI submitted comments to the U.S. Department of Justice

proposing modiﬁcations to the decades-old BMI consent decree

that would modernize the music licensing landscape, creating

a model that would better serve songwriters, composers,

publishers and music users in the digital marketplace. The

U.S. Department of Justice began an extensive examination,

with many BMI songwriters and publishers, as well as industry

organizations, submitting their comments in support of BMI’s

position. At this time, the comprehensive review is still ongoing.

BMI’s three immediate proposed updates to its consent

decree are:

§ Digital Rights Withdrawal: Permit publishers to give BMI

the right to license works for certain uses, while allowing

publishers to retain the exclusive right to license works

for other speciﬁcally deﬁned digital uses. This would

enable publishers and music users to negotiate their own

free-market digital deals, while granting BMI the ability

to continue to offer easy, efﬁcient access to its diverse

repertoire for many traditional music uses.

§ Bundling Rights: Clarify the decree to allow BMI to license

not just the public performing right, but any rights relating to

the musical work that a music user needs to bring its product

or service to the public and which a publisher elects BMI to

administer. This would create a one-stop licensing source to

meet the needs and match the pace of the digital marketplace.

§ Arbitration: Move the rate-setting forum from federal

court to a binding arbitration model, a quicker and less

expensive option for all parties.

Promising interest was evidenced in March, when the U.S.

Senate Judiciary Committee’s Antitrust Subcommittee held

a hearing led by Senator Mike Lee (R-UT) on the consent

decrees that govern the music licensing operations of BMI

and ASCAP. Titled “How Much for a Song?: The Antitrust

Decrees That Govern the Market for Music,” the Subcommittee,

in an open forum, engaged with stakeholders who would

be impacted by proposed changes to the BMI and ASCAP

consent decrees. The hearing included testimony from Lee

Thomas Miller, BMI songwriter and President of the Nashville

Songwriters Association International (NSAI), who presented

a powerful ﬁrsthand account of his journey as a music creator

and his ardent support for consent decree reform to protect

the livelihood of the American songwriter.

BMI is continuing its ongoing productive dialogue with the

Department of Justice and is optimistic that the many positive

developments in Washington, along with the Pandora ruling,

will shed necessary light on the critical need to reform the

rules that govern BMI’s business and rate-setting proceedings.

SONGWRITER EQUITY ACT OF 2015

This year, BMI took a leadership position within a coalition of

performing rights organizations and songwriter collectives

in seeking bipartisan Congressional sponsorship to move

forward the Songwriter Equity Act (SEA). As a result,

BMI PRESIDENT AND CEO MICHAEL O’NEILL, BMI SONGWRITER MAC DAVIS, REPRESENTATIVE DOUG COLLINS (R-GA), REPRESENTATIVE RANDY NEUGEBAUER (R-TX) AND NSAI PRESIDENT

AND BMI SONGWRITER LEE THOMAS MILLER IN REP. COLLINS’ D.C. OFFICE IN APRIL.

11PROTECTING COPYRIGHT

signiﬁcant steps were taken on the road to equity

for music creators and copyright owners. In March,

Congress reintroduced the Songwriter Equity Act

in both the House and Senate; its passage would

update provisions in the copyright law to level the

playing ﬁeld for songwriters, composers and music

publishers to receive fair compensation for use of

their intellectual property.

Speciﬁcally, the Songwriter Equity Act of 2015

would:

§ Amend Section 114(i) to allow BMI’s rate court

to consider all relevant evidence, including

payments to artists and record labels, when

determining digital performance rates for

songwriters, composers and publishers.

§ Update Section 115, which regulates the rate

paid to publishers under a compulsory license

for reproduction of recorded music, to a rate that

reﬂects free market conditions.

BMI strongly supports the SEA, which would shift

the rate standard to a willing buyer/willing seller fair

market standard.

U.S. COPYRIGHT OFFICE MUSIC LICENSING

STUDY

In February of 2015, after almost a year of research,

interviews and analysis into whether the current

economy, the U.S. Copyright Ofﬁce released its

ﬁndings in a comprehensive study entitled “Copyright

and the Music Marketplace.” The Ofﬁce determined

that the current music marketplace structure

undervalues musical works in the digital space and

is in need of reform.

A number of recommendations were made that

align with BMI’s proposals for its consent decree

modiﬁcations, including a form of digital rights

withdrawal, bundling of mechanical and performance

rights, and fair compensation at market value for creators. Additional

recommendations called for more transparency and the like treatment of all

uses of music within a modernized framework of collective licensing.

In April, Maria Pallante, the U.S. Register of Copyrights, testiﬁed before

the House Judiciary Committee on the copyright issues it will address

in the coming years. This concluded a two-year Congressional review

of copyright issues, led by Chairman Bob Goodlatte (R-VA), many of

which greatly impact the music industry. Register Pallante pointed to

the “Copyright and the Music Marketplace” study, calling for more equity

for music makers and a shift towards market-oriented approaches. In

June, Register Pallante stated that the Copyright Ofﬁce itself needs

modernization in order to efﬁciently address the needs of the 21st century

U.S. copyright industry. BMI continues its conversations with the Register

and other members of the Copyright Ofﬁce in our efforts to modernize the

uring the ﬁscal year ending

June 30, 2015, BMI generated

unprecedented revenues of $1.013

billion, an increase of $36 million,

or 3.7% over the prior year, and distributed

and administered more than $877 million in

royalties to the songwriters, composers and

publishers it represents, a historic high. These

successes underscore the enormous value

of the BMI repertoire and the undiminished

relevance of BMI’s license offerings in a

transforming marketplace.

BMI’s continuous drive to diversify revenue

sources resulted in several new benchmarks.

For the ﬁrst time in the history of a U.S.

performing rights organization, revenue from

digital sources, including Amazon, Hulu, Netﬂix,

Pandora, Spotify and YouTube, exceeded $100

million, up a staggering 65% since last year.

For the second consecutive year, cable and

satellite-delivered entertainment generated

the largest portion of BMI’s domestic revenue.

General Licensing experienced steady

growth and including other income achieved

a record high of $137 million. Revenue from

media licensing totaled $484 million. Due

to a downturn in the value of many foreign

currencies, we concluded ﬁscal year 2015 with

international royalties totaling $292 million, a

decline of 5% compared to last year. Excluding

the foreign exchange rate impact, BMI’s

international revenues would have reached a

record high.

DIGITAL LICENSING

BMI’s Digital Licensing team had a record-setting year exceeding $100

million as a result of more than 500 billion digital copyright transactions.

Ongoing contributors included Apple, Hulu, Netﬂix, Pandora, Rhapsody,

Spotify and YouTube, among others. This year BMI signed its ﬁrst

audiovisual agreement with Amazon, including Amazon Prime Instant

Video, the Internet giant’s growing service for award-winning original

content. This impressive achievement in digital licensing is attributable to

BMI’s ability to identify, capture and maximize new growth opportunities

across a growing variety of digital platforms.

GENERAL LICENSING

BMI’s General Licensing team hit several new milestones this year

and again achieved record revenues across categories, including bars,

restaurants and a multitude of retail and other business establishments.

In addition, the team added more than 14,000 new licensed businesses

to the hundreds of thousands of businesses in the Company’s portfolio.

This continued growth in General Licensing establishes BMI’s strength in

the marketplace and remains a key differentiating factor in our ongoing

success.

GLOBAL PERFORMANCE

BMI music continued its consistently strong performance around the world

this year, despite economic challenges overseas. The phenomenal, enduring

appeal of the BMI repertoire and our diverse sources of international income

balanced the decline in the value of local currencies, resulting in an overall

strong showing of $292 million.

International revenue continues to play a substantial role in BMI’s ability

to compensate afﬁliates who have entrusted their creative work with us

for worldwide representation. To that end, BMI’s international efforts are

evolving to match the needs and pace of a dynamic global marketplace.

REVENUE

& ROYALTY DISTRIBUTION

REVENUE

& ROYALTY DISTRIBUTION

$300

2011 2012 2013 2014 2015

TOTAL INTERNATIONAL

REVENUE

(MILLIONS)

GENERAL LICENSING ADDED MORE THAN

NEW LICENSED BUSINESSES TO THE HUNDREDS OF

THOUSANDS OF BUSINESSES IN BMI’S PORTFOLIO

MI’s leadership in music rights

administration centers on the

Company’s commitment to

implementing technology solutions

to strengthen its core business and align with

future industry opportunity. In a year where

more copyright transactions were processed

than ever before, BMI’s Technology and

Operations teams effectively translated

vast quantities of data into high-value and

actionable information at a phenomenal rate.

horizon this year, more than 500 billion of

which were digital performances. Since 2011,

the trend for streaming music has increased

greater than ﬁvefold, and BMI’s cumulative

digital transactions during this ﬁve-year period

continued to surpass the trillion mark for

performances, demonstrating the Company’s

ability to accurately and efﬁciently manage

big data.

The growing trend of on-the-go, self-serve

mobile activity was reﬂected this year, as BMI’s

mobile app version 2.0 gained over 50,000

new users since its launch at SXSW in 2013.

Of this amount, 56% represent new users for

the ﬁscal year of 2015, with a multiple visit

return rate of approximately 90%. For ﬁscal

year 2015 in total, BMI mobile users viewed

1.5 million screen sessions, representing a

broad consumption of a comprehensive set of

online services. BMI Live also surpassed an

important milestone this year, achieving more

than 300,000 performances since inception

in 2011. Within this performance count, more

than 25,000 songwriters, composers and

publishers have been represented.

TECHNOLOGY

DISTRIBUTION &

ADMINISTRATION HIGHLIGHTS

BMI’s Distribution & Administration

team processed an impressive 56,000

new songwriter, composer and

publisher applications, bringing ﬁscal

year 2015’s total number of afﬁliates

to more than 700,000. Additionally,

the total number of creative works now

registered and licensed by BMI has

grown to more than 10.5 million.

This year also marked the completion

of BMI’s highly anticipated

“green” transition to 100% paperless royalty statements, facilitating an

environmentally friendly business process while delivering efﬁciencies for

multiple BMI departments. Keeping pace with BMI afﬁliates’ preference to

conduct business electronically, royalty recipients are now receiving direct

deposit for nearly 70% of all distributions.

INTERNATIONAL DEVELOPMENTS

During the year, BMI spearheaded several collaborative initiatives

involving music creators, publishers, FastTrack, and CISAC (International

Confederation of Societies of Authors and Composers), the global

association of copyright and authors’ rights societies and collective

management organizations, of which BMI is an active member. The goal

of these efforts is to maximize efﬁciency and transparency in delivering

foreign royalties to their rightful recipients as we look towards improved

data in a global future.

TRANSACTIONS HIT

THE 600 BILLION

HORIZON THIS YEAR,

MORE THAN 500

BILLION OF WHICH

WERE DIGITAL

PERFORMANCES

IN FY15

56,000

NEW SONGWRITERS,

COMPOSERS

AND PUBLISHERS

JOINED BMI

TOTAL NUMBER OF AFFILIATES

NOW EXCEEDS

700,000

TOTAL NUMBER OF

CREATIVE WORKS NOW REGISTERED

AND LICENSED BY BMI

MORE THAN

10.5 MILLION

TECHNOLOGY

Future. BMI Writer Since 2003.

Our commitment to songwriters and composers – from living legends

to rising stars – endures. We value you, your music, your rights.

valuing music since 1939.

Dolly Parton. BMI Writer Since 1962. BMI Icon 200 3.

valuing music since 1939.

Our commitment

to songwriters and

composers – from

living legends to

rising stars – endures.

We value you, your

music, your rights.

DollyParton14_BillboardV3.indd 1 10/20/14 6:23 PM