BMG CEO Hartwig Masuch has praised his staff for delivering “BMG’s best first half yet” in an open letter to the label.
“Our revenues grew 9% at constant currency to €296m (reported 5.2%), and EBITDA was up 7% to €50m (reported 3.1%),” praised Masuch today (August 31), as the company revealed its half year results (Jan-June). “While publishing revenues continue to reflect the impact of lockdown and were flat, in recordings revenues were up 29.4% on the same period last year and we outperformed the market in both digital and physical in each of our three core markets of the US, UK and Germany.”
BMG’s revenue was split as follows: 62.9% publishing and 37.1% recordings. The label’s growth in recorded music was spearheaded by the likes of KSI, Garbage, Jason Aldean, Joan Armatrading and Van Morrison. Masuch also voiced his excitement about recent signings, such as Duran Duran, Santana, Bryan Adams and Soft Cell.
The results revealed that while streaming remains BMG’s No. 1 format overall (accounting for 65% of recording revenue), for the first time vinyl has overtaken compact disc to become “BMG’s leading physical format by value”.
In the letter, Masuch said that BMG’s greatest challenge now is “to remain one step ahead” of the myriad changes the industry is going through.
“We were correct in our view that in a streaming world music companies needed to abandon their old ways (hence our fairness agenda),” he wrote. “We were correct in our analysis that a streaming world is a catalogue-dominated world (hence our repertoire strategy). And we were right that the influx of investor funds into music would reshape the market forever (hence our alliance with KKR). We should not kid ourselves that others won’t reach the same conclusions, even if a little more slowly. We need to constantly stay ahead of them, adjusting course as necessary. One thing I am confident they cannot copy, however, is our spirit – our commitment to work for artists and songwriters rather than at their expense.”
BMG and global investment firm KKR joined forces in March to pursue recorded music, publishing and other music rights acquisitions. In its half year results, BMG revealed that its first deal has been completed with four more in due diligence. It reported a pipeline of 71 deals and an aggregate value of "more than €1bn."
Masuch also took time to discuss the label’s ongoing work to increase the traction of its fairness agenda. BMG was praised earlier in the year when it announced it was speeding up payments to more than 20,000 US and UK songwriters on old contracts.
“We continue to lead the drive for justice for artists and songwriters and continue to take concrete steps to address historic unfairnesses,” said Masuch. “Expect more measures to come.”
Notably, the label said its staff of 1,001 includes 255 recruited during the pandemic – with its global workforce also seeing “no lay-offs, furloughing or short-time working” during the period.
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