The story
Founded by Henry Katzman in 1939.1
In the 1930s, radio was coming to prominence as a source of musical entertainment that threatened to weaken record sales and opportunities for "live" acts. The Great Depression was already draining artist revenues from recordings and live performances. ASCAP, the pre-eminent royalty/licensing agency for more than two decades, required radio stations to subscribe to "blanket" licenses granting ASCAP a fixed percentage of each station's revenue, regardless of how much music the station played from ASCAP's repertoire. In 1939, ASCAP announced a substantial increase in the revenue share licensees would be required to pay. BMI was founded by the National Association of Broadcasters to provide a lower-cost alternative to ASCAP. As such, BMI created competition in the field of performing rights, providing an alternative source of licensing for all music users.
The vast majority of U.S. radio stations, and all three radio networks, refused to renew their ASCAP licenses for 1941, choosing to forgo playing ASCAP music entirely and rely on the BMI repertoire. In February 1941, similar to the agreement it had made with ASCAP, the Department of Justice and BMI entered into a consent decree, requiring certain changes to BMI's business model, including giving licensees the option of paying only for the music they actually used instead of buying a blanket license. The U.S. District Court in Milwaukee was chosen by the Justice Department to supervise the decree for both BMI and ASCAP.
Competing against the strongly established ASCAP, BMI sought out artists that ASCAP tended to overlook or ignore. BMI also purchased the rights to numerous catalogs held by independent publishers or whose ASCAP contracts were about to expire. To attract newer writers, BMI proposed to compensate songwriters and publishers on the basis of a fixed fee per performance, as opposed to ASCAP's two-tier system, which discriminated against less-established songwriters. Despite its original motivation regarding radio station royalties and its focus on radio station revenues versus artist revenues, BMI became the first performing rights organization in the United States to represent songwriters of blues, jazz, rhythm and blues, gospel (black genres, performers, and writers that ASCAP did not want to represent), country, folk, Latin, and—ultimately—rock and roll. During the 1940s and 1950s, BMI was the primary licensing organization for country artists and R&B artists, while ASCAP centered on more established Pop artists. Also during that time, BMI expanded its repertoire of classical music, and now represents the majority of the members of the prestigious American Academy of Arts and Letters and the winners of 31 Pulitzer Prizes for Music.
BMI's practice of selling only "blanket licenses", rather than licenses for individual songs, led to a major antitrust law dispute between BMI and CBS, that resulted in the 1979 case, Broadcast Music, Inc. v. CBS, Inc., in which the U.S. Supreme Court held that the prohibition of "price fixing" by the Sherman Act was not strictly literal, and should be interpreted in light of the economic efficiencies an agreement brings.
In July 2017, BMI renewed long-term partnership with C3 Presents, the world's largest music festival producer.
In October 2022, BMI announced that it would transition from its historical not-for-profit structure to a for-profit model in order to invest in growth and technology modernization. It agreed to be acquired by an investor group led by New Mountain Capital in November 2023, and the deal closed on February 8, 2024.
From Wikipedia’s article on Broadcast Music, Inc., shared under CC BY-SA 4.0.5