It turns out that the latest headline results from Bertelsmann slightly underplayed the growth of BMG.
Sharing further insights into the half-year results, CEO Hartwig Masuch has sent a memo to staff praising the performance of BMG.
While BMG increased its revenues by 3% in the first six months of 2018, stripping out the negative effects of currency exchange shows underlying growth of 9.2%. As Masuch pointed out, that result is “better than some of our major competitors” and “nearly twice the expected rate of growth of the market as a whole”.
Universal Music Group recently reported a half-year revenue increase of 6.8% at constant currency.
“Growing revenue is important, but we are doing so sustainably and paying a higher percentage of revenue to our artists than our competitors,” said Masuch.
In the recorded music side of the business, revenue increased by 38% and now accounts for a third of the company’s turnover.
“We achieved this increase almost entirely through organic growth,” said Masuch. “Our spending on acquisitions in the first half was at its lowest since we started our initial build phase of BMG nearly 10 years ago. We are getting bigger and more successful not by buying companies, but by signing and developing artists and songwriters and ensuring they are paid for their music.”
Masuch said the results show that “we do what we say we will do”. In a Music Week cover story earlier this year, BMG's CEO revealed that its expansion by acquisition was over and it would target organic growth.
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