BMI announces record royalty payments for digital music

Artists are getting paid more for their music, but is it enough?

By Parker Hall September 10, 2015

Despite well-documented battles between digital music distributors and the artists they stream, digital media royalties from services like Apple Music, Spotify, YouTube, Netflix and Pandora paid out by royalty giant BMI were up 65% last year—above $100 million dollars for the first time ever.

It was the largest category increase for the company, who distributes money for everything from Internet radio plays to TV and film licensing.

Overall, royalty revenues are higher than ever. BMI announced a new record for this fiscal year, with over $1.013 billion generated for songwriters, composers, and music publishers. Of that, $887 million went directly to copyright holders and musical creators.

With more and more people purchasing or listening to music through streaming services, the question remains — is $100 million in returned royalties through some of the largest media companies on the planet enough? Spotify pays out between .006 and .0084 cents per play, with top artists only earning big money for hundreds of millions of streams.

For such a large segment of the distribution market, digital distributors pay much less per play than companies in more traditional royalty generating segments like TV and film. Of the 600 billion performances BMI processed in the fiscal year, a whopping 500 billion of them were digital, a 25% increase over last year.

Evidence suggests that even BMI itself doesn’t think $100 million in digital distribution profits is enough, given the tremendous amount of plays that accounts for. The company spent a large portion of the past two years in a protracted legal battle with Pandora, finally settling for 2.5% of the internet radio giant’s profits.

Mike O’Neill, current president and CEO of the company is determined to get more money for artists. Despite record profits, he says, “We will continue to work hard on behalf of the more than 700,000 affiliates we have the privilege to represent, not only to make sure they can continue to earn a living doing what they love, but also through our ongoing efforts with Congress and the U.S. Department of Justice to rewrite the rules so they make sense for today’s digital world.”

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