BMI Is Changing To A For-Profit Business Model
BMI is changing to a for-profit business model, the company announced to its staff in an internal email Wednesday morning.
The performing rights organization, like most across the globe, had previously operated broadly on a not-for-profit basis, like its chief U.S. Competitor ASCAP, since it was founded in 1939. However, as for-profit PROs, notably SESAC and the relatively new Global Music Rights, launched in the U.S., the restrictions of that model began to limit BMI’s opportunities. BMI attempted a sale last year but did could not come to terms with potential buyers.
CEO Mike O’Neill tells Variety, “We realized that we needed to make certain changes to the organization in order to be even more competitive in the future. As you know, there’s lists of companies that waited too long to change. And as a result, you know, they’re no longer in business.”
Performing rights organizations collect the royalties due to songwriters and publishers from what is termed the public performance of their works, which can range from radio airplay to bars, restaurants, stadiums and more. The money collected by the organizations — and it is up to the songwriter or publisher which PRO they join — is then distributed back to the rights-holders. Under a not-for-profit model, the PRO retains only operating costs and other expenses and distributes the bulk of the revenue to its members. However, a for-profit model enables the PRO to operate more like a traditional business, although like ASCAP, it will remain under what is called the consent decree governed by the Department of Justice, which limits some of its business opportunities, particularly with regard to royalty negotiations with publishers.
Asked whether the rapidly changing music business has made it untenable for a PRO to operate on a not-for-profit basis, O’Neill said, “We found that the old model stifled us in terms of investing in BMI, and investing for the future, and that we weren’t able to actually grow. For example, if we wanted to invest in an IT project, that meant we couldn’t invest in other areas of the company, because it would affect that year’s distribution. But by changing the model, we’re able to bring in financing, we’re able to reinvest in companies, we’re able to profit from those companies and invest those to the benefit of BMI. We’ll be using this to enable BMI to do things that we were held back from doing.”
Asked whether the company’s attempted sale affected the decision, he said, “Initially, we hired Goldman-Sachs to help us view strategic opportunities, and there were discussions about how do we change the model. But we had already been looking at that, and at the end of the day, the board and BMI decided that it was in our best interest to control how we do this, and how we grow and how we how we can ultimately benefit our affiliates.
“Our goal is to be that champion for songwriters, and to continue to innovate and change so they have a stronger organization that they can rely on. At the end of the day, our mission isn’t changing. It’s always been about serving songwriters, composers and publishers.”
O’Neill’s letter follows in full below.
Hi everyone,
I’m writing today with some exciting and transformational news about the future of our company.
After a comprehensive and careful assessment on how best to position BMI for the future, we will be changing our business model, moving from operating on a not-for-profit making basis to for-profit. This will open up new and important opportunities for us to invest in our business and ensure we can continue to deliver on our mission to support our affiliates and grow the value of their music. And most importantly, our goal is to continue to grow our distributions at an even greater rate than we have before.
As you all know, we began a strategic review earlier this year to evaluate opportunities to grow our company and make the most of our evolving industry for our affiliates. The one thing we continually heard throughout that process reinforced what we have been thinking for some time: the need for us to invest in BMI and operate in a more commercial and forward-thinking way.
Growth requires investment. And in this new model, we can now structure, fund and operate new strategic opportunities, adopt new technologies and enhance and expand our services and products in a way that under our old model would have come at the expense of distributions.
I know this is a big change for us. There is no question that the old model served BMI well. But it also held us back and limited our ability to invest in the future in a meaningful way. Our move to for-profit gives us more financial flexibility and makes us nimbler to do what we need to do.
For example, we can explore a needed upgrade to distribution technologies to potentially allow affiliates to draw against their upcoming digital earnings; we can invest in, partner with, or buy a company that has emerging services for songwriters; or we can create a tool that presents affiliates with a digital record that tracks royalties across the full spectrum of their earnings — all things we have an interest in pursuing.
To make these types of investments in our old model, we would have had to choose just one option and focus on that at the expense of anything else. An IT upgrade, for example, meant investing in other areas of the company would have to wait, in order to minimize impact on that year’s distribution. Purchasing a company meant we’d have to operate it on a not-for-profit making basis and couldn’t drive any of the profits of that new company either back into BMI or use those profits to fund other opportunities.
In short, this new model will enable us to approach our business in ways we were never able to do before to stay ahead of the industry and the needs of our affiliates. It unleashes so many more options.
We’re excited about all the opportunities ahead of us, especially because we’re proactively doing this now from a position of strength rather than risk being forced to change in years to come. We are the number one PRO and just reported our highest distributions ever and expect this move will help reinforce our leadership.
But this is a long-term plan and not everything will happen overnight. It will take time because we are committed to getting it right. We fully recognize that this new path forward is only successful if our affiliates see the benefits. And we will continue to manage our costs and apply financial discipline to any investment decisions we make.
Our amazing team and your individual hard work and contributions have made this all possible. Because of you, we are in control of our destiny and that is a great place to be. We now need to make the most of this opportunity, and I know we will.
We will be communicating this move to our affiliates and sharing additional information with them to help them better understand this change and the benefits to them as a result. Growth for BMI means growth for our affiliates. We have prided ourselves on being a trusted guide and champion of the music creator for the past 80-plus years, and this new chapter will only strengthen that commitment as we look forward to the next 80.
Thank you for all that you do.
MON
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15 Christmas Business Ideas
© Provided by Small Business Trends christmas business ideasThe Christmas holiday is a busy time for many businesses. But some companies actually build their entire business model around this time of year. If you love the holiday season, here are some creative ideas for starting your own business opportunity in this niche.
The Economics of the Christmas Season in 2022The Christmas season often brings additional revenue for most businesses in the retail industry. But sales fluctuate from year to year. In 2022, experts project an increase of between 7 and 9 percent from 2021. They expect an increase of between 11 and 15 percent specifically in eCommerce sales.
Why You Should Consider a Holiday BusinessIf you’re ready to start your own business, here are some reasons to consider a holiday niche:
If you’re looking for lucrative Christmas business ideas for your next venture, here are some ideas to consider.
1. Deliver Christmas TreesLots of people buy Christmas trees for their homes during the season. But they may not have a way to get them home. If you have a truck or other large vehicle, pick out trees or deliver options of a certain size to their homes.
2. Catering ServiceServe families and businesses that host holiday parties with your own catering businesses. Offer traditional holiday favorites like turkey and stuffing, along with Christmas sugar cookies and peppermint candies.
3. Sell Gift BasketsGift baskets are a popular gift for friends, neighbors, co-workers, and clients. Offer a variety of themed options to appeal to various customers.
4. Shopping ServiceServe customers who don’t have the time or desire to shop for their own holiday gifts. You may offer services for a flat rate, or charge by the hour.
5. Gift Wrapping ServiceChristmas gifts are only complete when they’re beautifully wrapped. Let customers drop off their gifts for wrapping, or offer this as an extra service if you already offer personal shopping or retail options.
6. Christmas Lights ServiceA Christmas light installer may provide both interior and exterior decorating options. Create attractive lighting arrangements using their own decorations, or provide your own for an extra fee.
7. Christmas Cards SellerDesign and sell your own witty Christmas cards, either online or in a retail setting. You may also offer digital templates or printed cards that let people add their own family photos and personalizations.
8. Holiday Event PlannerLots of people and businesses host parties throughout the holiday season. Offer your services to handle all the details, from the food to the holiday-themed party entertainer.
More Great Holiday Season Business IdeasIf you’re looking for a business idea in the holiday niche, but none of the above speak to you, here are even more options to consider.
9. Christmas Tree FarmIf you have access to significant land, plant a variety of evergreen trees that customers can purchase. You may let customers visit your location and cut down trees themselves, or sell them pre-cut to local businesses.
10. Sleigh Ride ServiceSleigh rides are fun activities for winter festivals and other special events, especially those that target families with little kids. Invest in a sleigh and some horses or reindeer to pull it through the event. Then either charge a ride fee or get paid by the event organizer.
11. Winter Accessories Online StoreStart your own eCommerce business selling a variety of winter and Christmas products. For example, you could knit warm hats and scarves, or provide sweaters with Christmas characters or sayings on them. Create your own website or utilize marketplace sites like eBay and Etsy.
12. Christmas-Themed AttractionThere’s a huge demand for fun attractions to visit during the winter festival season. Offer activities for various family members, from Christmas cupcake making to designing witty Christmas cards. You can also connect with local shops and vendors to provide food and gifts.
13. Santa Costume SellingPeople often purchase Santa costumes for holiday parties or special events. You may either make these garments or source them from other companies. Then set up an online store or partner with retail locations.
14. Santa or Reindeer Rental ServiceYou may even contract with retail businesses or event planners to provide Santa or reindeer performers for special events. Animal handlers may need special training or licenses. But Santa performers often just need to look and act the part.
15. Gift Personalization ServiceThere are many ways to personalize holiday gifts, from embroidery to glass etching. Specialize in one or more of these options and then add names, dates, or quotes to various items for a special rate.
Are Christmas Businesses Profitable?Christmas businesses can be quite profitable. But the exact rate depends on the type of business since there are many niches within this category. For example, a typical retail profit margin can range from 0.5 to about 5 percent. However, caterers often have profit margins between 7 and 8 percent.
What Is the Best Business for Christmas?The best business for a Christmas audience may vary depending on each entrepreneur’s interests and goals. However, one lucrative business idea in this niche is offering Santa performers for retail businesses or special events. There are almost no startup costs and plenty of demand for this service during the Christmas period.
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Image: Envato Elements
3 Simple Tips For Expanding Your Business Into A New Market
Lion Shirdan is a marketing advisor, creative director and the founder of UPRISE Management, a 360˚ marketing, branding and creative agency.
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The Great Recession was a difficult time both economically and personally, for many of us. It’s hard not to immediately associate that period with failure and catastrophe. But downturns always present opportunities as well. And notably, many companies found opportunities during the Great Recession by expanding into new markets, disrupting the consumer landscape and ultimately finding enormous success.
These companies, including major corporations like Netflix, Amazon and Google, recognized that strategic expansion is critical to company growth and survival. Netflix launched its streaming service in 2007 and has since revolutionized the entertainment, media and production industries. Expanding beyond being just an internet search engine, Google bought Android in 2005, and three years later, the first Android-powered device was released. Meanwhile, Amazon recognized that e-books were part of the future of reading and developed the first Kindle in 2007.
Of course, these are billion-dollar companies—stories of exceptional success. Even so, their strategies can be applied at scale. But without extensive planning, companies attempting to diversify their product offerings and target new audiences can face formidable challenges that stunt growth and even cause financial strife. That’s why, at a time when I’m sure many businesses are considering how to shore up their foundations and continue growing, I am offering some tips to approach a new market.
Review Your Current Mission
Before taking any further steps, thoroughly review your brand’s current mission and business practices. What is the ethos of your brand? What are your core values and guiding principles? What is and isn’t working for your company in the present? Ultimately, this reflective process is an opportunity to assess whether expansion at this time is a smart business decision.
Analyzing your company’s mission is also paramount because it’s the central thread connecting where your brand is and where it wants to go. So aim to extend seamlessly into sectors that support and strengthen your mission rather than give your customers whiplash. And ensure that your mission is clear, well communicated, inspiring and ambitious until you make that move. Increasing your customer base, creating new products and growing your business are exciting prospects that can lead to abundant rewards, but you can’t redefine what your brand does if you don’t genuinely understand it.
Strategize For Your Brand
If your brand is well positioned to enter a new market, then it’s time to strategize and define goals for expansion. Returning to core values and existing business can help clarify which market(s) to target. A company that sells dish soap, for example, would likely find more success launching a suite of cleaning products than a luxury fashion line.
One challenge facing companies on the cusp of industry diversification is maintaining their unique brand identity. This is what sets you apart from competitors—what leaves a lasting impression in the minds of consumers and ultimately persuades them to use your services. We’ve found that organizing brand partnerships and collaborations—think GoPro and Red Bull and Uber and Spotify—can be an effective strategy for steadily transitioning into new markets. Yet the partnership alone won’t transform your identity. Rather, use it as a lever or as a steppingstone along the road to gradually evolve your brand.
Set Specific Goals
As I mentioned, there are many benefits to entering a new market; however, it can be overwhelming to work toward an organizational vision without isolating individual steps. Specifying incremental goals, metrics and key performance indicators makes it easier to evaluate your progress.
For example, though Netflix began producing its own media in 2013, that was likely not its guiding aim when it first introduced content streaming. Back in 2007, a more realistic goal for Netflix likely concerned converting existing users to streaming services and obtaining a larger library of digital offerings. By working toward those smaller goals, Netflix ultimately established itself as a successful distributor—and now, producer—in the entertainment space.
Penetrating a new market can be intimidating, rewarding and exciting all at once. Growth is seldom easy, whether personally, professionally or organizationally. It is, however, instrumental to long-term survival in our current landscape. More than survival, growth is what can realize the true potential of a given business. Imagine, for instance, that Amazon had remained just a marketplace for books—e-commerce would probably look vastly different than it does today.
Forbes Agency Council is an invitation-only community for executives in successful public relations, media strategy, creative and advertising agencies. Do I qualify?
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