News At A Glance

Agreement opens doors for online music

Five leading copyright societies Sept. 26 signed a series of bilateral agreements designed to simplify the licensing of the public performance of music to be used online.

BMI of the United States, BUMA of Holland, GEMA of Germany, PRS of the United Kingdom and SACEM of France have entered into agreements that authorize each other to grant licenses for online music use on a worldwide basis.

"The parties recognize that one transmission of music over the Internet may result in performances in multiple countries," according to a joint news release from the organizations. "It is clear that online music users do not want to enter into license agreements with each performing rights organization in various countries where their musical works may be performed online."

"We realize that the extensive use of copyrighted music is not limited to territorial boundaries in the online world. We hope that others will agree that this is a necessary step to assure the legal performance of music online, and that many other societies will enter into such agreements."

The agreements cover Webcasting, streaming, online music on demand, as well as music included in video (TV, motion pictures) transmitted online. They provide a mechanism to assure the proper distribution of license fees to authors, composers and music publishers on a worldwide basis. The agreement, which amends existing reciprocal representation agreements, is effective immediately and extends through Dec. 31, 2001.

Blue Cross reverses underwriting losses

The nation's 53 Blue Cross Blue Shield plans posted 1999 earnings of $171.8 million on their core business of underwriting, according to a study by Weiss Ratings Inc., the nation's only provider of ratings and analyses for all Blue Cross Blue Shield plans.

This reversed a pattern of widespread underwriting losses ($788.3 million) that plagued the industry in 1998.

In 1999, the Blues reported overall profits of $1.6 billion, realized in part through $457.6 million in capital gains. This represented a dramatic departure from 1998, when the industry relied heavily on the sales of profitable investments to offset underwriting losses. During that year, the Blues realized $818.7 million in capital gains and reported profits of $1.4 billion.

"We are encouraged to see that that the Blues are not relying as heavily on their financial market profits as they were in 1998," said Martin D. Weiss, chairman of Weiss Ratings Inc.

Among the 36 Blues plans that report data on individual lines of business, many showed an improvement in their comprehensive and medical lines. Even though they still lost money in the aggregate ($84.3 million) in these lines, it represented a reduction in the 1998 losses of $425.5 million.

Similarly, in their Medicare supplement (Medigap), these 36 plans reported $98.3 million in profits in 1999, representing a complete reversal from the $70.3 million loss reported a year earlier.

The Weiss ratings of the Blues are based on an analysis of a company's risk-adjusted capital, five-year historical profitability, quality of investments, liquidity and stability. The latter category combines a series of factors including asset growth, premium growth, and strength of affiliate companies and risk diversification.