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Radio Royalty Rate Decision Could Soon Affect Songwriters Incomes

1The latest chapter in an ever-raging battle between performance rights organizations and radio to set rates for music use on radio i has BMI and RMLC headed to Rate Court, for a decision that could change songwriter incomes.

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Guest post by Bobby Owsinski of Music 3.0

Songwriters have always made a good amount of performance royalties from radio airplay, and many still do under the right circumstances (meaning, a big hit). That said, there’s a constant battle between the performance rights organizations (PROs – ASCAP and BMI) and the RMLC (Radio Music Licensing Committee) to raise and lower the rates every time the issue comes up for negotiation. To make matters even more complicated, there’s competition between ASCAP, BMI, SESAC, and now Irving Azoff’s Global Music Rights (GMR) to get a higher rate the rest.

Since the previous agreement concluded at the end of 2017, the issue is now coming to head as BMI and the RMLC present their arguments in front of the decision making body known as the BMI Rate Court.

2According to the RMLC filing with the Court, it wants to reduce the rate that the 7,900 U.S. radio stations now pays from 1.7% to 1.4% of total revenue. That covers terrestrial broadcast, internet simulcasts, HD broadcast and multicasts. The argument is that radio isn’t as healthy as it used to be, which is essentially true since ad revenues are down and there’s a lot of blank commercial space even on the most popular stations and shows. Another argument is that BMI has lost a lot of members to GMR and isn’t as strong as it once was, so it doesn’t deserve to get paid the same.

BMI has countered with the argument that once upon a time radio airplay represented a lot of free promotion which helped sales of physical product, meaning more money in its member songwriters pockets. That’s no longer the case as physical sales have fallen through the floor, and fewer people use radio as their primary means to consume music, so there’s little promotional value.

There’s actually much more going on behind the scenes, but whatever is decided by the Rate Court will affect songwriter income one way or the other in the future, as it will have a snowball effect on the other PROs as well. If you’re a songwriter with songs on the radio, keep on eye on this.

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