BMG is taking direct control of its streaming business in a move the company describes as the biggest change to its recorded music strategy since launch 15 years ago.
BMG and its current distributor, Warner Music Group’s ADA, have agreed to part ways, enabling both companies to focus on growing their businesses and margins.
It will see a phased in-sourcing of distribution to all major streaming platforms, beginning at the end of this year with Spotify and Apple Music. BMG will continue to outsource physical distribution in a new deal expected to be announced shortly.
BMG CEO Thomas Coesfeld said: “This is a new chapter for BMG and marks a significant milestone for the music industry more generally as BMG becomes the first new global-scale full-service music company to emerge in the past two decades which controls its key routes to market. Taking direct control of our relationships with streaming services is a major leap forward in our mission to offer artists the most effective and efficient service. The new set-up will enable us to better market, service and advise our great artists and will further improve BMG’s relationship with key digital and physical partners.”
BMG’s recordings catalogue comprises around half a million tracks and the work of artists including AJR, Jason Aldean, Rick Astley, Black Sabbath, Buena Vista Social Club, Cro, 5 Seconds Of Summer, Max Giesinger Andy Grammar, George Harrison, Iron Maiden, The Kinks, Kylie Minogue, Jelly Roll, Dustin Lynch, Mecano, Mötley Crüe, Mötörhead, Nena, Rita Ora, Louis Tomlinson, Lainey Wilson, and many others.
Sebastian Hentzschel, BMG chief operating officer, said: “There are many advantages to third-party distribution in the early years of a new music company, but with BMG’s annual streaming rate in excess of 80 billion streams this year, it is time to unleash the benefits in terms of market insight and leveraging data that going direct will bring. This will enable us to be a better partner to our artist and songwriter clients and to digital services.”
Thomas Coesfeld paid tribute to BMG’s former distribution partner, Warner Music Group’s independent label services and distribution company ADA.
“We are very grateful to Warner Music Group and ADA for their trustful partnership,” he said. “With their help we have tripled our recorded business over the past seven years.”
Robert Kyncl, CEO of Warner Music Group, said, “We’ve always known that going direct on streaming was BMG’s ultimate objective and we’re proud to have helped them grow to the scale where they could achieve it. Taking this step will mean we create more space for ADA to focus on developing new partnerships, and for WMG to continue to grow our investment behind artists, songwriters and labels. We wish BMG all the best and know that we will have many other opportunities for successful collaboration.”
BMG is about to release one of its biggest albums of 2023: Tension by Kylie Minogue – Music Week’s latest cover star.