BMI Reports All-Time Profit High Despite Piracy

applemasker writes "Arstechnica is running a story chock full of links to other interesting things about BMI's amazing record profit and how the RIAA skews its sales statistics while strangling fair use." Phew, so the artists aren't really starving, but we still can't all go back to "borrowing" music from our friends instead of each purchasing our own copy.

Comments

What BMI will say

[Anonymous Coward]

"If it weren't for piracy, we would've made even more money."

Re:What BMI will say

[erick99]

This is a typical and specious argument that can't be argued against without looking and sounding shrill. It is an argument of convenience at best. I would counter with the fact that BMI's rate of growth has been steady going back nearly a decade and growth that smooth was probably not affected (much) by piracy or there should have been a bump in there somewhere.

Cheers,

Erick

Re:What BMI will say

[BoldAC]

Artists make most of their money from other sources now. Much like atheletes they make money from sponsorships...

What video these days doesn't push a product or three? Heck, videos contain enough commericals now that I wouldn't be surprised if MTV actually started showing videos again.

Smaller artists, like many of my friends, make most of their money from live performances... despite being signed to "major labels."

Sadly, these major labels often sign many artists to keep them from signing with other groups. Paying them a small fee and then "vaporwaring" their music keeps them out of the competition.

The music companies are bastards, bastards them all.

Re:What BMI will say

[erick99]

This is not new, not that it changes the argument but I was taping songs off the radio in the 60's when I was 10 years old. I would agree that it's easier now and the quality is better but copying songs is an "old" practice and I just don't know that it has the effect that the labels believe. When I got older and got a job, I began paying for my music as I believe most folks do.

Cheers,

Erick

Re:What BMI will say

[shark72]

Why would they say that? BMI collects royalties on performance rights, not CD sales. CD sales have nothing to do with their revenue stream.

Remember, BMI is a non-profit artists' rights agency, collecting royalties for composers and songwriters for performances -- not sales -- of music which was written or composed by their members.

Re:What BMI will say

[tigeba]

BMI is a non-profit organization that collects royalties for performances on behalf of artists. ASCAP is a similar organization. The money is obtained from entities like radio stations and then is distributed to artists based on statistical sampling of compiled performance data. Artists (songwriters, composers, publishers) select an organization (BMI, ASCAP) and register their works with them, and in return for a membership fee, the organization sends them a check if their performances show up on the radar.

Re:What BMI will say

[Commander Trollco]

Whether they are affected or not would be really beside the point, if we were to look at the problem from its root.

The owners of copyrighted material often say they suffer "harm" and "economic loss"
resulting from illegal copying. Like most arguments put forth by copyright enthusiasts, it holds little water - for several reasons:
The claim is mostly inaccurate because it presupposes that the copying individual would otherwise have bought a copy from the publisher. That is occasionally true, but more often false; and when it is false, the claimed loss does not occur.

The claim is partly misleading because the word "loss" suggests events of a very different nature--events in which something they have is taken away from them. For example, if the bookstore's stock of books were burned, or if the money in the register got torn up, that would really be a "loss." We generally agree it is wrong to do these things to other people. But when your friend avoids the need to buy a copy of a book, the bookstore and the publisher do not lose anything they had. A more fitting description would be that the bookstore and publisher get less income than they might have got. The same consequence can result if your friend decides to play bridge instead of reading a book. In a free market system, no business is entitled to cry "foul" just because a potential customer chooses not to deal with them. The claim is begging the question because the idea of "loss" is based on the assumption that the publisher "should have" gotten paid. That is based on the assumption
that copyright exists and prohibits individual copying. But that is just the issue at hand: what should copyright cover? If the public decides it can share copies, then the publisher is not entitled to expect to be paid for each copy, and so cannot claim there is a "loss" when it is not.
In other words, the "loss" comes from the copyright system; it is not an inherent part of copying. Copying in itself hurts no one.

Re:What BMI will say

[IronMagnus]

Case in point, my brother bought a CD, it wouldn't play in his car CD player. He pop'd it on his linux box and was able to make a copy despite the copy protection. Heres the irony. If the CD wasn't copy protected, we would have had no reason to make a copy of it... fortunately the protection was useless and easily circumvented for fair use.

Re:What BMI will say

[Sancho]

Of course, the copyright system itself is the reason we have book, media, etc. The system allows for the (supposedly limited) monopoly on ideas so that artists could make a living and produce their content. Without such laws in the first place, it's unlikely that we'd have the variety and multitude of movies, books, television shows, etc. that are out there. Some say it's a bad thing, some say it's a good thing, but in a free society that should be all about choice, it's pretty definitive of our ideals. Lots to choose from.

Now lots of people, including myself, believe that copyright has gotten out of hand. The extensions, for example, are completely unnecessary to the original goal. I don't think anyone here believes that it will take 70+ years for an author these days to recoup their investment plus make a profit on their book. In fact, since copyright depends upon the life of the author, we're truly just allowing for the estate of the author to live off of their work, something that doesn't jive (in my opinion) with the purpose of copyright.

But what it all comes down to is that it doesn't matter. We live in a society where copyright is the law. Copyright infringement isn't stealing, but it is against the law. A person doesn't deserve to download to music just because they'd never buy it anyway, so the store+record company+artist isn't going to lose anything. If you don't like the law, work to get it changed. But it doesn't mean it's acceptable to break it and justify it with crap like that.

Re:What BMI will say

[pyros]

If the public decides it can share copies, then the publisher is not entitled to expect to be paid for each copy, and so cannot claim there is a "loss" when it is not.

Um, no. Copyright is defined in the Constitution. It grants the creator of the work thr right to control how and when the a copy of the work is created and distributed. If this right did not exist, there would be drastically less incentive to create, and the public domain would become void of artistic works. The problem is that the original terms of copyright have been extended far beyond the point of any usefulness. When you say "if the public decides" you are ignoring the fundamental protection from the tyranny of the majority that the constitution affords us all. Would you sing the sae tune if the public decides they all have the right of prima nupta and line up to have sex with your wife on your wedding night to bless the union? You won't have been robbed of any property or income.

Re:What BMI will say

[Anonymous Coward]

If you don't like the law, work to get it changed. But it doesn't mean it's acceptable to break it and justify it with crap like that.

I am sorry, but that is utter crap. The average citizen or even groups of millions of citizens of low income have zero or near zero hopes of changing the law in the US. You can carry on with your righteous theories all day long, but you're absolutely wrong. It is the duty of citizens who feel that laws are unjust to break them. It is an honor to break laws that are created by an unjust legal system.

Re:What BMI will say

[bechthros]

"Heck, videos contain enough commericals now that I wouldn't be surprised if MTV actually started showing videos again."

dude, videos *are* commercials. They advertise the band's song/recording/performance, depending on the video. They're four-minute long chunks of TV that MTV is *paid*, usually by the bands themselves, to put on. The bands also pay for the production of the video as well. And you'll notice that they tend to come out right before a album relase or tour - they're just commercials to sell a product. That was the whole beauty of MTV when it started - it was basically a channel of 24-hour commercials that people would beg to watch. Same goes these days for M2 and fuse.

Somewhere along the line, MTV decided to introduce original programming, but keep it as low-budget as possible, hence reality television - no stars, no writers, no directors, no sets. Just producers, assistants, and a dozen or so poor saps ready to humiliate themselves on network television for a chance at a measly half a mil... after signing all the insurance waivers, of course. The budget benefits of reality programming are the reason it'll be around for a long time.

Re:What BMI will say

[syberanarchy]

People like you are the reason that the RIAA's line of "copyright ends when we say so" stays as the official mantra of the public. I mean, did you really just compare the ownership of an idea to deflowering someone's bride? And I thought the Hitler/Bush comparisons were out there.

If this right did not exist, there would be drastically less incentive to create, and the public domain would become void of artistic works.

Good point, except that the public domain IS becoming void of artistic works, and will continue to do so for the next 75+ years thanks to the work of the late Sonny Bono and other "public servants."

Probably longer than that, actually - I can see it now: the MICKEY II AP act - Money In Copyright Key II American Prosperity act - will ensure that copyrights last for up to 90 years after the corporation that bought them for pennies of the dollar goes bankrupt.

They (the corporations) are not holding up to their end of the bargain (limited copyright). So why should I hold up to my end by buying their music instead of taking what should rightfully be in the public commons? (I don't listen to music from the current times, thanks.) Because the law says so? You're going to have to give this free thinker a better reason than that, Jack.

The musicians are in the middle of the battle, and those who keep signing with RIAA labels have shown where their allegiances lie. Thus, they'll get no pity from me.

Re:What BMI will say

[d34thm0nk3y]

Of course, the copyright system itself is the reason we have book, media, etc.

WRONG! You shouldn't start your post with a logical fallacy. Creative works were produced long before the notion of copyright ever existed therefore you can never assert that copyrights were the cause without extra justification.

Really, you should build up to the logical fallacy that way it is more believable.

This of course is why we will probably never win in this battle. Nobody who cares enough about truth is willing to blatantly lie to take down blatant liars.

Re:What BMI will say

[mpe]

Of course, the copyright system itself is the reason we have book, media, etc.

Books (and libraries) predate the concept of copyright by a very long time.

The system allows for the (supposedly limited) monopoly on ideas so that artists could make a living and produce their content.

Actually copyright was invented to give the state control over use of the printing press. Resulting in the business model of the third party publisher. Media invented afterwards copied the same business model.

Without such laws in the first place, it's unlikely that we'd have the variety and multitude of movies, books, television shows, etc. that are out there.

Movies and televison postdate the invention of copyright, so it's anyone's guess how they might work without it. Whereas books predate the concept by thousands of years.
It's very much evident that authors will write books without copyright even existing. It's also far from clear that the existance of copyright does much to encourage authorship anyway.

Re:What BMI will say

[Free_Meson]

This is totally untrue for any number of social and economic reasons.

The only thing that would happen if IP laws went away is that business models would change. People would make their money in a different manner.

Period.

There is absolutely NO economic evidence that IP laws have ANY positive effect on the production of art or inventions.

From the beginning, it has merely been some people's THEORY that this is true - most of these people in government or business with other agendas than the free dissemination of ideas.

Well, people who really love to write, compose music, etc AND are already insanely wealthy -- wealthy enough to write for the benefit of others for free while at the same time supporting their families without any additional income. So, how many people do you think fall into that category? We could just go down the list of great american authors and see how many we would have had if there was no financial incentive to produce books... can you name one? I mean I know for a fact that Hawthorne, Twain, Melville, Fitzgerald, Hemingway, Steinbeck, and Salinger would not have written as prolifically if at all if there had been no prospect for financial incentive. The prospect of future returns paying either for previously incurred expenses or to sustain their overly extravagant lifestyle was a major part of the reason they chose to write.

More importantly, though, I think you completely misunderstand the nature of our economic system. Right now, for example, lawyers are rewarded handsomely when they successfully represent their clients. That makes law a profitable field, and because people like to have money it makes law a competitive field. More people try to become lawyers and, as a result, we have much better lawyers now, on average, than we did say 50 years ago. (read some case law and it will be quite obvious to you that the quality of representation has improved). Awarding copyright to artists does the same thing -- it makes the creation of art a competitive field. I don't want to read a book some idiot with family money put together, published, and distributed because I have very little interest in reading anything that a substantial portion of the population isn't willing to pay to read. (Substantial portion here doesn't imply mainstream, simply large enough to support a boutique publisher's overhead).

But this brings about another problem... if there is to be no copyright then who will pay to publish and distribute the books? Who will pay for the endless rounds of editing that go into every book you buy? Maybe you distribute electronically, though that has been wildly unsuccessful so far because people (and that is who we care about here, remember) don't like to read off of computer screens. They do that enough at work, and so maybe they print it out themselves for 4 cents a page... and so this 1200 page book in my hand would cost me $48 to print up. That is cheaper than the $60 that I paid for it, but that does not include the editing or the compensation for the writer...

For some reason, though, you were stupid enough to repeatedly make the point that copyright is without merit, and that it serves no constructive purpose in our society. How exactly would this society-without-copyright exist in your fairytale world? How would the creators of intellectual property profit from their massive investments of time, energy, and money? Maybe Steinbeck would write and publish his own books, you know, in that free time between 18 hour shifts as a bricklayer. Maybe Hemingway would have been able to write "The Sun Also Rises" imbetween digging ditches. I doubt it, though.

What irks me the most, though, is that a small-minded cretin like you infers from the fact that you can see no usefulness to one of the most important development in property rights in the last 3000 years that no one else has thought about the issue. You completely ignore the very real fac

Reminds me of South Park

[imehler]

Those Bastards! They did have enough for their 17th corvettes, solid gold diamond encrusted swimming pools and harem full of supermodels after all - that FBI agent LIED to us!

Still

[6169]

Phew, so the artists aren't really starving, but we still can't all go back to "borrowing" music from our friends instead of each purchasing our own copy.

I'll stop doing that when I feel the price for an album has settled to a more reasonable price point.

Re:Still

[6169]

I disagree with your analogy, because you are implying that by paying less than I currently am for an album, I'm getting something for free, and somebody else is getting shafted. I don't think that's true. It shouldn't cost 90% of my $17 to edit the tracks, produce the album art, make the product, and advertise it. That's an incredible profit margin.

That system was created before the technology to do all of that cheaply became commonplace. Excellent software exists to record, edit, and mix tracks, and the hardware needed to do so well doesn't cost that much more than a high-end audio card. There are plenty of very talented artists and graphics designers who would jump at the chance to do cover art. The cost of the physical media and case is marginal. The last hurdle is advertising and promiting the album, but the internet provides an incredible medium for this. All we need is apropriate demand, which the record companies are doing their best to stifle.

That is why I don't feel that paying a little less for a CD (and still giving the artists more than they get now) is a bad thing.

I sense the potential for confusion

[tepples]

BMI != BMG

BMG is a record label.

BMI is a performance rights organization representing songwriters and their publishers. It handles royalties for radio play of over 4 million copyrighted songs. The other major performance rights organizations are ASCAP and SESAC.

Re:I sense the potential for confusion

[starrsoft]

I think this article was presented a bit out of context. (i.e. "how the RIAA skews its sales statistics while strangling fair use.") This is after all an organization that "handles royalties for radio play". This does nothing to counteract the argument that piracy is hurting music sales. This is the profits of playing music on the radio, which would logically be greater, because of file sharing not less.

I think the problem the RIAA has with file sharing is that is shifts the profits an artist receives to being funneled through (with usual middleman skim-off) BMI type companies instead of BMG (RIAA) type companies. This article isn't and shouldn't be about RIAA type sales not decreasing; it is about the revenue, that music lovers direct to artists, shifting to other industries as a result of technological evolution.

Re:I sense the potential for confusion

[shark72]

"paying more than 85% of revenue collected to copyright owners." Copyright owners = the record company's"

I'm not sure how you made that connection. BMI is a performers' rights organization. They represent (and help collect money for) songwriters and composers, not record companies. Songwriters and composers, on the whole, make absolutely terrible money, and it's organizations like BMI that look out for them.

It's covered here.

-1, obvious

[rootofevil]

seriously, when are they going to realize that P2P isnt hurting anything.

this will likely be spun as "look how well our lawsuits are working, people are actually buying music again"

Comment removed

[account_deleted]

Comment removed based on user account deletion

Am I the only person here

[jb.hl.com]

Who still buys RIAA artist CDs?

Recently I've bought about 4 CDs, totalling about 75 dollars of music (50 gbp). Why? Because I like the artist, I want the included artwork and gimmicks and because it is only fair that the artist, the record company and the music store and anyone else involved in the production of the record get paid. If you like an artist, I mean REALLY like an artist, you will be happy to pay for their music. Can't call yourself a fan of some music if you're not willing to pay for it,

YMMV.

Re:Am I the only person here

[Shadow99_1]

Um I buy music, but not from any major label... I go out of my way to support bands I like who aren't signed to major labels and I support small 'indy' labels.

Why? Because I like their music and I can accept it as good music. They write their own stuff. They stick to their artistic ideals. And they will keep doing it as long as they find it interesting to do.

Why don't I support bands with major label deals? Because most don't have much real talent. Most don't write their own songs. Most submit to the whims of the labels marketing department rather than sticking to their artistic gifts. And finally most are at the utter whim of the labels themselves. One bad record and they may never be heard from again.

I wish the band Ra (try to search for them, not all that easy) would drop their contract with their label, though they will loose all rights to their work (it's owned by the label as pretty much every artists is). They have talent, but got no exposure and seem to have dropped compltely off the map... That happens all to often with bands with real talent, but aren't the next boy band or talentless bimbo girl that the music label can push around...

BMI is not the RIAA

[common middle name]

As far as I know BMI handles royalties for broadcast rights and things like "covers" and songwriting credits. It has nothing to do with sales of pre-recorded music which is what the RIAA claims is hurt by piracy. When you buy a cd from a major label band BMI doesn't see any money. They only benefit from the radio station you listen too playing a BMI artist's songs or the local kareoki bar patrons singing along to a recording. This has nothing to do with pre-recorded music or file sharing. Nothing to see here...move along.

Friends?

[YrWrstNtmr]

....but we still can't all go back to "borrowing" music from our friends instead of each purchasing our own copy.

The entire online community is not your 'friend'.

It's not about money, it's about controll

[argoff]

In the next few years, it will be easier to nuke every city in the planet than it will be to reign in the unrestricted flow of information. The Media industries simply can't maintain their monopoly alone anymore, so they're trying to microregulate all the technology industries and fear monger everyone else.

PS: which executive candidate do you think is in the pocket of the media industries, and which do you think is in the pocket of the tech industries?

Bringing an artist's bottom line into existence

[tepples]

Unless they mean that piracy can bring an artist's bottom line into existence-- an interesting concept.

"They're pirating our records!"

"How can we get them to buy our records? What's something we can offer that the pirates can't?"

"Ummm... liner notes?"

"Bingo. Let's have $TEEN_FEMALE_SINGER get her butt done and put more pictures in the liner notes of her next album."

So then the label advances $TEEN_FEMALE_SINGER the money for cosmetic surgery on her backside, effecting her bottom line.

Artists? Starving?

[blair1q]

When was the last time Van Gogh collected a royalty check?

Corporate ownership of music should be outlawed.

It's unnecessary.

BMI is not a record company!

[shark72]

BMI is a performance rights organization. They are not part of the money flow involved with buying a CD. They are non-profit, run by and for artists and composers -- the "good guys" according to many Slashdotters.

They handle public performances. Not CD sales..

Again: BMI = good guys. They collect money for artists and performers -- the little guys. And this money does not come from CD sales. It would be a stretch to claim that P2P would have any effect on BMI's revenue stream. It's all explained here.

This has to be the mother of all straw men, folks.

Re:BMI is not a record company!

[antiMStroll]

From BMI' site:

" BMI also licenses non-broadcast general music users, such as nightclubs, discos, hotels, bars, restaurants and other venues. While it is virtually impossible to log and make a separate distribution for such performances, they are accounted for by BMI's basic premise that the material used in such venues reflects the songs currently being performed on commercial broadcasting stations. Therefore, royalties collected from general music users are distributed on the basis of performances on commercial radio and television stations."

They're the same clowns strong arming taxi companies, restaurants, dentists - any commercial venue with a radio on. I'm not sure I'll group them with the 'good guys'.

Re:Something we don't know

[shark72]

"Maybe the BMI could tell us something we couldn't figure out for ourselves. We know the music artists aren't starving, its not too hard to figure out when they are driving around H2's and flashing their bling-bling."

I think you're confusing the performers -- the pretty people whose photos are on the cover of the CD -- with the songwriters and composers who work behind the scenes creating the music that's recorded by the music stars. Sometimes they're the same person (in the case of a singer/songwriter) but often they're not.

A career as a composer or songwriter is often shitty, backbreaking work for little or no recognition. Very few Hummer H2s for the majority of those who've made this their chosen profession.

And it's BMI who looks out for these people.

Re:"Barrowing" music?

[HeghmoH]

It always gives me a chuckle when I see someone call outright stealing "borrowing". Let's look at two key differences between the two:

It always gives me a chuckle when I see someone call copyright infringement "outright stealing". Let's look at two key differences between the two:

1: When one steals something, it usually deprives the original owner of the objects. This is true of stealing a CD from a music store. The store no longer has that CD to sell to its customers.

2: When something is copied against the will of the copyright owner, the copyright owner loses nothing but an abstract potential.

"Stealing" music from a friend in the form of a copied CD or MP3 or downloading music from strangers on the internet does not meet the definitions of stealing.

I believe people SHOULD respect copyright, because it causes people to make valuable contributions to society. But let's not muddy the waters to make a point against those who may disagree; it isn't stealing just because you disagree. It's copyright infringement. Let's at least be honest.

when did we not borrow copies?

[fermion]

Phew, so the artists aren't really starving, but we still can't all go back to "borrowing" music from our friends instead of each purchasing our own copy.

When did we not borrow copies? Before P2P we made tapes. I suppose before recorded records we just stole the music and lyrics and sang it ourselves. To this day we burn CDs.

I don't think the issue is borrowing or copying or stealing. I think the issue is how much will it cost to do business in prerecorded media, and who will be willing to enter that business with those costs. Clearly small labels have always had a tough time. The big guys are and have been making money hand over fist for a very long time, at least the past 20 years.

Leakage or piracy or whatever is part of the cost. So is the drugs, prostitution, and violence. Some people are never going to buy a recording. Some always will. The goal should be to encourage the middle to buy without pissing them off and pushing them to the end that never buys. This is a worthwhile goal. P2P and ITMS is part of that goal. I know people that are buying music again because of these services.

Re:I'm hungry

[ToasterTester]

Recording companies and contracts are more like insurance companies. They are taking the risks on the artist. They pay for the recording, marketing, manufacturing, and distribution. IF the artist is a flop the recording company has lost the money not the artist. SO the recording companies pray out of all the groups they sign a one or two will make it big. That will help the recording company recoop losses from the failed artist. So while they do make lots of money off off a couple artist they are loseing on others.

Yes, the artist if they sell have to pay back recording costs before they make money themselve and some only break even. That is why songwriter royalities are so important to artists. The artists may not make money off records themselve, but make money from their song writing.

When a record is played on the radio, or a CD sold part of the money goes to the record company in the past called mechanical royalites. Then another part of the money go to song writer royalities. Plus we aren't talking about much money a few cents per play. That what many artist have to pay the bills with.

>>> but we still can't all go back to "borrowing" music from our friends Borrowing from friends sound innocent, trouble is it's long term borrowing, and not alway friends, but strangers on the internet. Theft is theif. In the past the recordind companies accepted so much of this "borrowing" between friends. But when people started sharing with anyone and everyone you blew it for everyone. So don't blame the record companies and artist who want to get paid. You abused the system and now EVERYONE is paying for your greed.

Re:Inflation

[shark72]

You're absolutely correct -- in fact, the price of music has not kept up with inflation. That record on sale for $9.99 in 1984 would cost $17.60 in today's dollars; meanwhile (believe it or not) the average price of a new CD is now down to about $13.50.

"Chock full of links"?

[TheFrood]

No, it's chock full of 404's. Here are the correct links:

open and vicious attack on fair use
bring civil cases themselves
bends its statistics

You know what BMI does, right?

[werdna]

BMI does not sell records, and its revenues do not depend upon record sales. BMI is one of three main competing performance rights associations (ASCAP and SESAC are two others), who control the exclusive right to publicly perform (as opposed to distribute and reproduce) music. Typical licensees are restaurants, night clubs and radio stations.

Presumably, even pirates eat, party and listen to the radio.

Not that I don't sympathize with your position, but BMI is in a different business from the RIAA.

This is what we need...

[generationxyu]

Record companies (not the RIAA) and artists (not Lars Ulrich) coming out against the DMCA and the restrictions against fair use and P2P. Get the artists to say that they make money off of filesharing. This is an old argument, but a true one... I first heard Modest Mouse when a friend of mine burned me a CD of theirs. I fell in love with the band, and bought that and their four other albums. I've also spread the word that Modest Mouse rocks my socks, and gotten several other people into them as well.