BMG parent company Bertelsmann has announced its financial results for 2021, which show a 10.1% year-on-year increase in the music company's revenues to €663 million.
“BMG’s figures show a strong return to growth following the pandemic as we delivered our best performance yet,” said BMG CEO Hartwig Masuch in a memo to staff. “They reveal the scale of our investment in acquiring music catalogues – where we invested as much as in the previous three years put together. And they show incredible performance in our fast-growing recordings business, especially in vinyl, where we more than doubled our sales.”
The company’s EBITDA profit measure increased by 5.4% to €144m.
Investment in 2021 was split in favour of acquisitions (54%) and 46% for signings.
Catalogue recordings and production music both grew revenue by a quarter while publishing revenues from streaming grew by a fifth. The impact of the lockdown hit publishing performance revenues, but those streaming revenues continued to grow strongly through the pandemic.
“Now the live music business is back, it is turbocharging our overall publishing business with a very strong start to 2022 seeing revenues up more than 20% across January and February,” added Masuch.
While publishing remains the dominant part of the business, recordings now account for 38% of sales.
Sales growth in recordings outpaced the market in Germany and the UK, and was level with the market rate in the US. Vinyl sales grew more than 100% compared to 2020 and overall physical sales grew by 44%, approaching three times the rate in the overall market announced by IFPI last week.
An emerging trend is for artists already deep in negotiations with competitors to break off those talks and come to BMG instead
2021 acquisitions included deals for Tina Turner, ZZ Top, John Legend and Mötley Crüe. Signings and re-signings for BMG last year included 5SOS, Bryan Adams and Louis Tomlinson in records, and D’Mile, Diane Warren, the Juice Wrld estate and Mick Jagger and Keith Richards in publishing.
“We believe the emphasis on service which we have made our calling card and which you deliver on daily, will become increasingly important as a differentiator in the months and years to come,” said Masuch.
“Acquisitions remain a real focus, and the extraordinary support of Bertelsmann means no deal is out of our reach. But while money is necessary it is not sufficient to strike successful deals. BMG’s track record in respectfully and dynamically reviving great catalogues, both digitally and physically, continues to be our most potent tool in attracting world-renowned artists and songwriters. An emerging trend is for artists already deep in negotiations with competitors to break off those talks and come to BMG instead because they want to ensure their life’s work is duly respected.”
Underlining the global performance, Masuch said that a new office in Mexico will open mid-year.
“You can expect further expansion,” he added. “The objective is not to be in every territory, but always to strike the optimal balance between costs and revenues for our clients.
“Our deeply ingrained view that music companies can only ultimately prosper if they put artists and songwriters first continues to serve us well.”