Broadcasters Sue BMI For Expanded Direct Licensing, Lower License Fees and Access to Cue Sheets

By • January 27, 2010

The owners of approximately 1,200 local television stations, citing a “massive reduction” in audience size, have sued performing rights society BMI in rate court, asking the Court to set “reasonable fees and terms” for the use of BMI music in television programming including terrestrial and digital platforms, grant broadcasters access to cue sheets, and add a provision to the blanket license that essentially creates a credit for each performance of a musical work that is directly licensed with a composer or publisher. The terms of the new blanket license credit, if approved, are likely to be decided by a judge in a case brought by BMI against DMX, a commercial background music company.

Click to download: Broadcaster Suit Against BMI (petition) | BMI Suit Against DMX (petition)

When a music performance is direct licensed, a deal is struck between the broadcaster and the copyright owner of the music that represents a direct payment for performance royalties, and those performances no longer are licensed through the performing rights organizations. These direct payments can take the form of a single lump-sum buyout of the performing right or a series of payments that are paid as long as the program is broadcast.

The creation of a widely available broadcaster direct licensing credit for individual works has the potential to profoundly affect how composers and songwriters are paid for public performances, as many more broadcasters could be in a position to realize significant cost savings by direct licensing the performance right directly from composers or as part of the composer’s agreement with a production company.

The resulting shift of the performing right licensing process away from royalty societies and into individual, private deals with production companies, music libraries and composers could create major changes in how composers and songwriters are paid performance royalties for their music as private negotiations by individual copyright owners replace collective representation by the performing rights societies. For example, production companies that own copyright as a result of composer work-for-hire agreements could be paid a direct license fee by one or more broadcasters for score music they own. What portion of those direct license fees would be payable to composers depends entirely on the individual composer’s agreement with the production company.

Music libraries could also find themselves in the position of being potential middlemen in negotiations for direct license payments with production companies, leaving composers dependent on whatever language may be in their agreements with music libraries to determine what portion of direct license fees, if any, is paid to the composer. So-called “retitling” libraries who do not own copyright may represent a better option for composers in this situation, since they do not own copyright and cannot grant a direct license unless their contract specifically gives them the ability to do so.

Currently, only broadcasters on a per-program license can realize a direct licensing deduction from a performing rights society (PRO), and only on a per-show basis if the entire show is free of music represented by that PRO. The per-program license requires substantially more broadcaster reporting requirements and is priced higher than a blanket license.


By blumuze on January 27th, 2010 at 10:06 am

This will be nothing less than a 360 degree disaster for the complete “food chain” of music providers from composers to their representatives (publishers, music libraries, etc.). The only benefit I can see will accrue to the broadcasters and the very biggest music conglomerates (UNI, BMG and affiliates, and so on) who will make a separate peace and keep the profits for themselves.

Now more than ever, creators of music need a strong union to fight for them. Alas, it will never happen.

By Eric Goetz on January 27th, 2010 at 11:08 am

Admittedly, I’m too lazy to read the actual suit, but I’m really confused by this. On what grounds are the broadcasters suing? If they don’t want to air any of BMI’s music, that’s their right, but if they want to use that music, then they have to agree to BMI’s terms, right?

I don’t want to pay your prices for your product/services, so I’m going to sue you, and force you to lower your prices?!? Last I checked, that wasn’t how capitalism worked.

By David varga on January 27th, 2010 at 6:35 pm

Wake up people. This practice happens all the time when major networks hire composers. They are made to sign all of their rights away including royalties.

By Erik Blicker on February 21st, 2010 at 9:31 am

Are we as composers allowed to take the judge of the rate court out to dinner?

I am sure the broadcasters are doing that right now.

By Ron Mendelsohn on June 4th, 2010 at 10:48 am

So-called “retitled” libraries do not represent a “better option” for direct licensing since often they do not have the right to direct license at all. In a direct licensing situation, “retitled” libraries would simply not collect any performance licensing fees and this money would be lost. How is this a “better option” ? It is inconceivable that “retitled” libraries would put their broadcast clients in direct contact with their composers and ask clients to negotiate these fees separately with each individual composer. This scenario would be extremely unwieldy and unworkable and the end result would be that broadcast clients would steer clear of using “retitled” libraries at all. Instead, they would favor working with exclusive libraries that do own their copyrights and are able to negotiate these rights. The reality is that direct licensing is yet another area where the “retitling” business model falls short and another reason why composers should avoid these deals. On an industry level, the fact is that only the PROs have the power, sophistication, clout and experience to negotiate fair and reasonable rates with broadcasters; the more their negotiating power is chipped away by legislators, broadcasters and special interests and put in the hands of individual companies and composers, the more we will see performing rights fees whither away to nothing, in which case we will all be losers.

By louis on January 29th, 2011 at 12:50 pm

im getting the run around on my royaltie im trying to get a cue sheet to show i was wrongly paid but they are not sending me the cue i was advised to go to small claims..but i dont know who to direct my law suit towards at bmi. which department

By louis on January 29th, 2011 at 12:54 pm

im also trying to see if the royalty payments are mine, because i have been getting royalty statements for over a year now for the same song..and they are recouping the funds back from my first royalty payments..which dept do i sue at bmi


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