Why a BMI Sale to Private Equity Could Be a Good Thing for Songwriters

Submitted by jon on Thu, 08/24/2023 - 15:50

Yesterday, I wrote a post exploring the potential downsides for songwriters of a BMI sale to private equity. I laid out the legitimate concerns around declining royalty distributions and lack of transparency. However, after reflecting further, I decided to challenge myself to see if I could make a case for why the deal could potentially turn out alright for creators. As an industry observer aiming for nuanced perspective, in today's post I present some counterpoints arguing why a BMI sale may not be all bad for writers' incomes.

The news that performing rights organization BMI is considering a sale to private equity has raised some concerns among songwriters. However, there are also ways this deal could potentially benefit creators. As an industry observer, I wanted to provide a counterpoint exploring why a sale may not be so bad for writers' incomes.

Potential for Useful Competition

It's true that BMI does not directly own any copyrights. They collect and distribute public performance royalties on behalf of publishers and songwriters who grant them the license to do so. However, despite worries about profit-driven motives, new private ownership could inject useful competition into the licensing market.

Right now, BMI and ASCAP dominate the PRO space in the US. A private equity owner could be incentivized to disrupt their duopoly by improving royalty collection and payment efficiency. With proper regulatory oversight, this competition could reduce operating costs that currently eat into distributions.

Investment in Innovation and Technology

A cash infusion from a sale could also allow investment in technology and innovation that benefits copyright holders. BMI has already claimed its for-profit pivot last year helped fund upgrades to its affiliate services and platforms. More of this would be welcome.

Commitments to Protecting Songwriters

Of course, BMI will have to back up its assurances that writers' interests will stay protected under any deal. But with the right sale terms locking in fair compensation commitments, and regulatory scrutiny monitoring anti-competitive behavior, this shift could turn out alright for creators.

Avoiding a Rush to Judgement

I understand the instinctive skepticism about private equity buyouts in the current economic climate. However, we shouldn't assume the worst before details emerge. There are hypothetical scenarios where a BMI sale ends up empowering, not exploiting, songwriters.

What are your thoughts on the sale? I'd be curious to discuss in the comments any potential upsides I may have overlooked as well as downsides to consider. The aim is to have a balanced, nuanced perspective. There are reasonable cases to make on both sides of this issue.