Digital Music News - DMX Beats BMI In Performance Rights Battle...

DMX Beats BMI In Performance Rights Battle...

Tuesday, July 27, 2010
by presnikoff

DMX the rapper is going back to jail. But DMX the B2B background radio provider is having better luck with the law. The company has just prevailed over BMI in its long-running performance rights battle, and potentially established a major precedent for "alternative licensing structures" to the blanket performance payment.

In the immediate term, the decision means that DMX can pay lower and variable performance licenses to BMI, based on direct licensing arrangements with certain publishers. Essentially, federal district judge Louis Stanton of the Southern District of New York allowed DMX to pay an "adjustable blanket license" based on these direct payments.

That structure works against the umbrella licensing approach of BMI, and empowers DMX to continue striking direct publishing deals using its own technologies. "DMX believes that securing licenses directly from music publishers presents an opportunity for the publishers – and the writers they represent – to receive greater royalties through DMX's increased use of their musical compositions," DMX general counsel Christopher Harrison offered in a statement. "In addition, DMX's royalty reporting is completely transparent, allowing publishers to see exactly how many times each one of their songs was performed on DMX's service and the resulting royalty payments."

Sounds like a serious dig on the reporting infrastructure of BMI, though more battles undoubtedly remain. "We strongly disagree with the court’s decision in the DMX case, which ignores the long history of Performance Right Organization (PRO) licensing agreements in the background music industry," BMI offered Digital Music News. "We are examining the decision in depth and evaluating the basis for an appeal."

Decision here.

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Comments (5)

brent Wednesday, July 28, 2010

The PROs are a important organizations that have provided a ton of value and protection to artists and rights holders. However, in regards to back ground performance, the model hasn't been as reliable as it could be and the cost of business will always be covered before the artists / lables / publishes receive their just rewards. A direct license between DMX and the publishers combats this, and in turn "should" deliver greater profits to the rights holder.

If DMX is able to demonstrate exactly what songs were played, where they were played and how often, that granular reporting can be shared with the rights holders directly. That type of data offers clear visibility. It gives the rights holders a greater opportunity to negotiate fees. This will increase their returns while at the same time potentially increaseing DMX's margins. In the end, the rights holders still win.

The PRO's are needed organizations. However, until they can better justify their business expenses and provide more detailed reporting / royalty calculations for background use, companies like DMX, Muzak and Playnetwork will be very disruptive to the PRO's; at least when you consider the precident that was set by the courts via this ruling.

presnikoff Wednesday, July 28, 2010

Just posted a copy of the decision, here.

Maxwellian Wednesday, July 28, 2010

Thanks for posting the decision. I'm trying to wrap my head around this, an d realizing that DMX side deals are now much easier with all the new tech and roy alty tools.

Seems like a real threat to BMI? In background - one song is pretty much replace-able for another. Like, who cares who's playing the soft strings and piano?

Ignacio Thursday, July 29, 2010

I'm hearing that Wal-Mart is doing something similar with their background in-store music? Basically licensing music themselves or even paying composers directly for songs?

Kernel Muster Sunday, August 01, 2010

"Bowling centers have evolved to use of rock-and-roll played very
loud, to attract customers and as part of a “cosmic bowling”
experience."

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