BMG revenues up 5% in first half of 2020

BMG revenues up 5% in first half of 2020

BMG increased revenues by 4.8% year-on-year for the first half of 2020, according to parent company Bertelsmann.

Revenues were up to €282 million (£251.9 million), while operating EBITDA was unchanged at €49m (£43.8m). It is BMG’s best first-half result since it was founded in 2008.

The company said that it has weathered the Covid-19 pandemic, which forced the closure of the company’s 19 offices worldwide.

“Thanks to dynamic growth in music streaming, further facilitated by the company’s broad and highly digital set-up, any lost revenues due to postponed releases or disruptions of physical distribution were more than compensated for,” said a statement.

The company’s focus on proven and established artists paid off with streaming of its recorded catalogue up 49% year-on-year. Overall recorded music streaming was up 26%. Digital accounted for 83% of recordings revenue and 48% of music publishing revenue during the period.

Digital revenues as a share of BMG’s total revenue grew to 59% in the reporting period, compared to 56% in the prior year.

BMG CEO Hartwig Masuch said: “To deliver a record result in the midst of a pandemic is a remarkable achievement. It is a testament to our artist-centric business model, but also to our 926-strong team worldwide who went to extraordinary lengths to maintain service to our artist and songwriter clients.

“Our growth is almost entirely organic. Despite the high levels of M&A in the wider music industry, we have not made a major acquisition since 2017. Our focus is on growing by delivering better, fairer, more efficient services to artists and songwriters. There is no doubt musicians are hurting through the pandemic, particularly with the loss of live business. That puts a particular responsibility on record labels and music publishers to help artists and songwriters maximise their earnings.”

BMG released music in the period by rapper KSI (who had the biggest-selling UK debut album during the first six months), Run The Jewels, Conkarah and newcomer Curtis Waters. New signings included Aloe Blacc, Jason Mraz, Run The Jewels and CHAII.

Highlights for BMG’s publishing business included Lewis Capaldi, Blossoms, Ufo361, Nav and Tame Impala. Publishing contracts were signed with Erika Ender, Diane Warren, Runaway June and Patricia Kelly, while the Rolling Stones recorded their first new composition in eight years, Living In A Ghost Town.

Other transactions during the first half included global partnerships with Britain’s ITV Studios and with ex-Beatle George Harrison’s Dark Horse Records label.

BMG increased its range of artist services with a move into the neighbouring rights business, expanded into Canada in the production music sector, and launched the Renew Records label in the United States. BMG Production Music signed a cooperation agreement with the AI-based music-to-video platform MatchTune.

In response to the coronavirus pandemic, BMG launched a new feature on its myBMG service portal that enables artists to work together with songwriters on creative projects.

“We are here to help artists and songwriters make a living from their creativity in every way possible,” said Masuch, “and we will continue to expand our services.”

Masuch also provided an update on the company’s response to racial disadvantage.

In a note to the BMG team, Masuch wrote: “Action is more important than words, and I am glad to say we are already making good progress on the pledges we made in the wake of Blackout Tuesday. Elections are underway for our new Diversity & Inclusion Council, we will be announcing details of our latest Black community outreach effort in the US later this week and we are in the middle of consultation on the results of our review of historic acquired recording contracts. We will not waste this opportunity to move things on.”

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