Performance rights organization BMI hailed its new agreement with radio broadcasters on Tuesday (August 19), declaring that it included its “largest rate increase ever” for royalties paid on music played on the air in the US.
Now, MBW can confirm it is indeed a whopper of a raise.
According to documents filed with the US District Court for the Southern District of New York, AM/FM radio stations will pay a headline rate of 2.14% of their gross revenue for a blanket license to play songs represented by BMI for 2022 and 2023, rising gradually to 2.20% for 2026-2029.
Given that the previous agreement between BMI and the radio stations represented by the Radio Music License Committee (RMLC) set a blanket fee rate of 1.78% for the 2017-2021 period, that means there will ultimately be a 23.6% increase in the rate radio stations pay for playing BMI-represented music on the air.
The vast majority of that money (around 85%) will be distributed to the songwriters and music publishers who own the publishing rights to the songs represented by BMI.
The agreement between BMI and the RMLC applies to 8,895 commercial radio stations.
It includes discounts for digital revenue made by radio stations in the gross revenue calculation: a 30% discount for revenue from display ads/sponsorships on the stations’ websites and apps, and a 25% discount for revenue made from stations’ streaming services.
In the US, radio stations pay royalties on song rights but not on rights to music recordings, meaning artists and labels aren’t paid for terrestrial radio broadcasts of their music.
BMI’s increase is likely to represent a not-insubstantial windfall for song copyright owners.
In June, the National Music Publishers’ Association (NMPA) said that US music publishing wholesale revenue hit $7.04 billion in 2024.
The NMPA estimates that 8% of that revenue came from radio, which implies around $563 million in US radio revenue for publishers in 2024.
Meanwhile, S&P Global estimates that traditional radio stations in the US made $11.24 billion in ad revenue in 2024. (That figure includes talk and sports stations, as well as music-led networks.)
That said, terrestrial radio revenues in the US are shrinking as advertising dollars shift to digital.
The 2024 revenue was down 3.7% from the previous year, per S&P Global, which forecasts revenues will shrink further to $10.08 billion by 2029.
Shortly after BMI announced it had struck a deal with the RMLC, another major PRO – ASCAP – announced it too had struck a deal with the RMLC.
Court records show that ASCAP and the RMLC moved on August 15 to have their ongoing case over royalty rates dismissed, but the court filings didn’t disclose the terms of that agreement.
BMI and ASCAP are generally considered to be the two largest PROs operating in the United States, but the field has seen some new entrants in recent years, including Irving Azoff’s Global Music Rights (GMR). According to a report at Inside Radio, GMR’s own deal with radio stations may have influenced the BMI deal. The federal court adjudicating between BMI and the RMLC allowed GMR’s deal to be entered into evidence in the case.
Until recently, both BMI and ASCAP operated on a not-for-profit basis, and BMI itself was owned by a consortium of radio stations. However, in 2022 BMI switched to a for-profit model, and the following year, it announced it was being sold to private equity firm New Mountain Capital.Music Business Worldwide
