BMI brought in $1 billion in revenue for the third straight year. And SONGS Music Publishing indicated it is looking to sell. Also, Apple removed the iOS App Store from iTunes.
BMI Revenue and Distributions on the Rise
BMI raked in $1.13 billion in revenue for the third year in a row, reported Billboard, a 6.6 percent increase over the previous year.
In its fiscal year ending June 30, 2017, BMI also increased distributions to songwriters and publishers by 9.9 percent. The amount reached $1.023 billion.
Mike O’Neill, the PRO’s president and CEO said, “No matter how much the industry continues to evolve, BMI remains the leader in supporting songwriters, composers and publishers and maximizing their royalties across platforms … We are thrilled to have been able to achieve these record distributions, but we still believe our affiliates deserve more. We thank them for entrusting their music to us and will continue to work hard on their behalf to secure the full and fair value of their creative work.”
A closer look at BMI’s revenues showed that media revenue (television, cable and radio) was $524 million, up 6.5 percent. General revenue (background music in stores, hotels, airlines, bars and clubs) was up 6.43 percent, to $149 million. BMI licensed 13,000 new businesses last year on top of the 15,000 businesses it added to its ranks in 2016.
The growth of new media revenue from digital platforms like Pandora and Spotify slowed, although it did increase by 7.24 percent. The introduction of direct deals between publishers and digital services, like the one struck up by major labels and Pandora, likely affected the growth of BMI’s distribution. This past year, BMI distributed approximately $30 million from direct deals to its songwriters. This amount is not counted as part of its total revenue.
O’Neill explained, “While the administration of direct digital deals is relatively new, we’re seeing the benefits across the board … BMI generates new business, our publishers benefit from our distribution expertise and our affiliates continue to receive their royalties from a trusted source. It’s a smart solution for everyone involved.”
That being said, the commission BMI gets for distribution payouts to songwriters from direct deals is part of the total revenue. This means that because of direct deals, BMI collected $30 million less this past year. If this amount had been counted as part of new media revenue, that revenue amount would have been up 20 percent.
Direct deals also impact BMI’s overhead calculations. Distributions are typically taken out of revenue to determine BMI’s expenses. However, because of direct deals, this expense is not able to be accurately determined. BMI’s administrative fee was at 12 percent this past year.
According to BMI, it processed about 1.4 trillion performances in the most recent fiscal year, up 40 percent from the year before. 1.35 billion of these were digital performances. The company said this shows its “ability to manage big data and convert it to actionable information.”
SONGS Looking to Sell?
SONGS Music Publishing may be on the market for $160 million or more, said Billboard.
The indie music publishing company hired LionTree Advisors to shop it, according to sources. It houses songwriters Lorde, the Weeknd, Diplo others.
Principals and founders of SONGS Matt Pincus and Ron Perry, plus partner Carianne Marshall are said to be commanding bids of $160 million and more. Hits first reported the potential sale.
In 2016, SONGS produced almost $8 million in net publisher share/grow profit, which carries a 12 times multiple. Usually copyright owners seek out a 15 times multiple. SONGS also provided a forecast for NPS in 2014 of $12 million.
Analysts and others have been predicting whether or not SONGS could command as much money as is speculated on the market. Sources said the publisher is in possession of a large number of pop hits, but that these types of songs frequently have a “decay factor” and will not be worth as much in the future. Other experts said because SONGS has solid songwriter contracts, it is on very solid ground, because it has the capacity to build its catalog.
Two other major indie publishers are currently also on the market: Carlin Music; Ole. This fact may either dilute the market for bidders or instigate more aggressive bids.
Sources close to the situation indicated that the company might be looking for sales because it received a buyout offer and wants to check the market. Other sources said that if there was a buyout offer, the offer was probably from a major label like Sony Music Entertainment or Warner Music. Both these companies have been eyeing songs A&R executive Perry to head Columbia Records and Warner Bros. Records. Both labels declined to comment.
SONGS head Pincus also did not offer comment on the situation.
Apple Streamlining iTunes, Removing iOS App Store
iTunes for PC and Mac is shifting its focus back to music with a redesign, according to The Verge.
iTunes 12.7 for Mac and PC, released earlier this week no longer has any options for syncing apps or ringtones from a desktop to an iPhone, iPad or iPod Touch. It has also completely eliminated the App Store.
Apple said, “If you previously used iTunes to sync apps or ringtones on your iOS device, use the new App Store or Sounds Settings on iOS to re-download them without your Mac.” Apple said further that after the update, apps and ringtones are not available for re-download can still be synced by plugging in an iOS device, thus saving custom ringtones, etc.
Apple has received regular criticism about iTunes’ unwieldiness as software. This latest update is a way to streamline the software and bring it back to its original focus: music.
The update also brings users’ attention over to its redesigned App Store, coming in iOS 11. The lack of App Store on the desktop may also make bringing iTunes to the Windows Store easier than before.