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BMG Rights Management

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BMG Rights Management GmbH
Bertelsmann Music Group (2009–present)
Company typeDivision
IndustryMusic
Predecessors
FoundedOctober 2008; 16 years ago (2008-10) in Berlin, Germany
Headquarters
Berlin
,
Germany
Number of locations
20 countries (2020)
Area served
Worldwide
Key people
  • Thomas Coesfeld (CEO)
  • Mathis Wolter (CFO)
  • Ben Katovsky (COO)
ServicesMusic rights management
RevenueIncrease €602 million (2020)
Increase €137 million (2020)
Number of employees
974 (2020)
ParentBertelsmann
Websitebmg.com
Footnotes / references
BMG's main distributor is Universal Music Group for physical media marketing only,[1] with digital distribution duties being transferred to BMG's own systems. Additional distributors, depending on artist and division, are Sony Music, RED Distribution, PIAS Group, SPV GmbH, Good2Go, Demon Music Group, Rough Trade and others.

BMG Rights Management GmbH (also known simply as BMG) is an international music company based in Berlin, Germany.[2] It combines the activities of a music publisher and a record label.[3][4]

BMG was founded in October 2008 after Bertelsmann sold its stake in Sony BMG to Sony.[5] From 2009 to 2013, the investment firm KKR held 51% of the company, which became one of the world's largest music publishers during that time.[6][7] BMG is 100% owned by Bertelsmann and one of the group's eight business divisions.[8]

History

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Music at Bertelsmann

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Main article: Bertelsmann Music Group

In the 1950s, Bertelsmann entered the music business when it added music to its book club.[9] Ariola, a record label, was launched and Sonopress, a pressing plant, was established.[10][11] In 1975, Ariola opened an office in the United States.[12] Bertelsmann acquired Arista Records in 1979 and RCA Records in 1985, thereby becoming one of the world's largest music companies.[13] Its various subsidiaries were brought together in 1987 to form Bertelsmann Music Group (BMG), which did business in a number of genres, including folk, pop, and in particular classical music.[14]

In response to declining sales in the overall music market, Bertelsmann agreed to merge its record label interests with Sony in 2003; the company was called Sony BMG.[15][16] Furthermore, in 2006, Bertelsmann sold its subsidiary BMG Music Publishing to Universal Music Group.[17][18] Having reached the conclusion that established music publishing companies and record labels were not appropriate for an increasingly digital music business, Bertelsmann sold its stake in the Sony BMG joint venture in 2008.[19] The company was subsequently renamed Sony Music Entertainment.[20]

Launch of the new BMG

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In October 2008, Bertelsmann launched the new BMG with a small portfolio of recorded music rights of around 200 artists it retained from Sony BMG.[3][21] It declared it would pursue a business model focused on fairness, service and transparency.[4][22]

The launch of the new BMG came amidst the 2008 financial crisis, and within two weeks of the collapse of Lehman Brothers.[23][24] Since Bertelsmann could not supply the required funds on its own, a 51% stake was sold to financial investor KKR in 2009.[25][26][27] Bertelsmann retained 49% and the right to appoint the company's management.[28] The transaction allowed BMG to increase its equity ratio.[26]

International expansion

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Initially, Bertelsmann had announced that the new BMG would focus on the European broadcast market. After KKR became the majority shareholder, the company set its sights on expanding internationally.[29][30] A key step towards achieving this goal was acquiring Cherry Lane Music Publishing in 2009, which provided BMG with its first foothold in the United States.[31][32][33][34] BMG made several other purchases in 2010, including Evergreen Copyright Acquisitions.[35][36]

In 2011, Bug Music was bought by BMG,[37] followed by music publisher R2M Music in 2012.[38] Bertelsmann was also reported to be interested in buying EMI,[39] but EMI was ultimately acquired by Universal Music Group and Warner Music Group (record labels) and Sony/ATV Music Publishing (songwriters).[40][41] The regulatory authorities approved the deal subject to some conditions, including the sale of several labels.[42] BMG was thus able to acquire Mute Records (2012) and Sanctuary Records (2013),[43][44] as well as the publishing catalogues of EMI Virgin Music and Famous Music UK from Sony/ATV.[45]

Becoming a group division

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In 2013, KKR sold its stake in BMG to Bertelsmann,[46] making it the sole shareholder of the company.[47] Under the leadership of Chief Executive Officer Thomas Rabe,[48][49] who had been a key driver of BMG's expansion during his time as Chief Financial Officer,[31] Bertelsmann again cited music as one of its strategic growth areas.[50]

In 2013, the company began to represent rights to songs by Robbie Williams and the Rolling Stones.[51][52] Record labels were also added to the portfolio including Union Square Music (distributor of Universal Music's ZTT Records and Stiff Records),[53] Vagrant Music and Infectious Music (2014),[54][55] as well as S-Curve Records[56] and Rise Records (2015).[57] Other acquisitions followed in 2016, including the label ARC Music and the catalog of The End Records.[58][59] By acquiring Basement, BMG entered the market in Brazil,[60] one of Bertelsmann's growth regions.[61][62] In 2016, the company also signed an agreement with Warner Music's Alternative Distribution Alliance for the physical and digital distribution of music,[63] allowing BMG to consolidate its longstanding sales structures.[64] BMG further expanded by entering the Chinese market in cooperation with Alibaba, allowing the online company to distribute the work of musicians and composers via its web channels while securing copyrights.[65]

In the 2015 financial year, BMG was part of the Corporate Investments division at Bertelsmann.[66] In 2016, the media group turned the subsidiary into a stand-alone division.[8] Today, BMG is considered a prime example of how growth platforms are created and leveraged at Bertelsmann.[67][68]

Acquisition of BBR Music and new labels

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In 2017, BMG announced the purchase of BBR Music Group,[69] including the labels Broken Bow Records, Red Bow Records, Stoney Creek Records, Wheelhouse Records and the music publisher Magic Mustang Music.[70] With a value of more than 100 million dollars, the transaction was the largest recorded music acquisition in the company's history.[71] BMG thus improved its position in the country music segment and ensured its long-term presence in the Nashville music industry and its overall impact on the United States market.[70]

In 2022, BMG announced its first new British record label within the group since 2009, Tag8 Music.[72][73][74] This label was set up in association with ex-Bros member Craig Logan and his management company Logan Media Entertainment, with Tag8 Music featuring established acts such as Pixie Lott, Roachford, and Louise Redknapp as part of its roster. On the Official Albums Chart Top 100 of 4 November 2022, the label charted its first hit album in the form of Blue's Heart & Soul.[75][76][77]

In October 2023, BMG signed with Universal Music Group for physical distribution, and started self-distributing its own catalog on digital platforms, thus ending their partnership with Warner Music.[78] The transition of physical distribution to Universal took place over the course of 2024 and is set to officially change over in October of 2024.

Corporate structure

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BMG's parent enterprise is BMG Rights Management GmbH, a limited liability company according to German law. The company's objective is "the marketing of music, as well as its development and delivery" for use in media, at concerts and for other purposes.[79] BMG has numerous subsidiaries and shareholdings, for example, BMG Rights Management (Europe) GmbH.[80] In addition to Germany, BMG is present in Australia, Brazil, China, France, Italy, Spain, the UK, the Benelux countries, the United States, Canada, and Scandinavia.[81]

BMG's senior management includes Thomas Coesfeld (Chief Executive Officer), Mathis Wolter (Chief Financial Officer), Ama Walton (General Counsel and Chief Human Resources Officer) and Ben Katovsky (Chief Operating Officer).[82] Masuch has been a member of Bertelsmann's Group Management Committee since 2013.[83]

In the 2018 financial year, BMG posted revenues of €545 million. Rights and licenses accounted for 91.1% and products and merchandise 8.9%. Almost half of its revenues (44.1%) were generated in the United States. Other important markets were the United Kingdom (24.7%), Germany (6.3%) and France (3.9%).[84]

Business model

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BMG offers musicians the services generally provided by music publishers and record labels.[3] Unlike its major competitors, it runs them under the same roof and on the same technology platform.[85][86][87] More recently, it has added film, television, and books to its roster of services.[21][88]

Publishing

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BMG publishing represents the rights of songwriters.[89]

Production music

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BMG has a significant library of production music (library music), for use in films, television, advertising, and other media. These catalogues include MusicDirector (part of Talpa Music), Human Music, Music Beyond, X-Ray Dog, Beds & Beats, Valentino Production Music, Immediate Music,[90] AXS Music,[91] Altitude Music, and Must Save Jane.[92]

Labels

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Awards

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References

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  1. ^ "BMG Forms Alliance With Universal Music Group". Universal Media Group (Press release). October 19, 2023.
  2. ^ "Musikverlag BMG". mediabiz.de (in German). Retrieved January 10, 2018.
  3. ^ a b c Ohler, Arndt (October 9, 2008). "Bertelsmann bietet Musikern neuen Service". Financial Times Deutschland (in German). p. 5.
  4. ^ a b Hein, David (October 16, 2008). "Bertelsmann belebt BMG". Horizont (in German). p. 6.
  5. ^ Spahr, Wolfgang (October 14, 2008). "Bertelsmann Unveils BMG Rights Management". billboard.com. Retrieved January 10, 2018.
  6. ^ "Bertelsmann ist die Musik wieder wichtig". Die Welt (in German). March 2, 2013. p. 13.
  7. ^ Briegleb, Volker (March 1, 2013). "Bertelsmann holt die Musik zurück in den Konzern". heise.de (in German). Retrieved January 10, 2018.
  8. ^ a b Renner, Kai-Hinrich (March 23, 2016). "Bertelsmann sortiert sich neu". Handelsblatt (in German). p. 24.
  9. ^ 175 Years of Bertelsmann: The Legacy for Our Future. Munich: C. Bertelsmann Verlag. 2010. p. 27. ISBN 978-3-641-05407-6.
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  11. ^ "Superstar und Freund der Mohns". Neue Westfälische (in German). December 23, 2014. p. 3.
  12. ^ Mohn, Reinhard (2008). "Von der Welt lernen: Erfolg durch Menschlichkeit und Freiheit" (in German). Munich: C. Bertelsmann Verlag. ISBN 978-3-570-01110-2.
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  24. ^ Grabitz, Ileana (March 4, 2013). "Wie Bertelsmann wieder Musikriese werden will". Die Welt (in German). p. 14.
  25. ^ "Bertelsmann: Duett mit Heuschrecke". Der Tagesspiegel (in German). July 9, 2009. p. 20.
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  27. ^ Spahr, Wolfgang (August 15, 2009). "BMG Is Back: Buying Songs With KKR Cash". Billboard. p. 17.
  28. ^ Nagl, Hans G. (July 9, 2009). "KKR greift Bertelsmann im Musikrechtegeschäft unter die Arme". Handelsblatt (in German). p. 12.
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  34. ^ Paine, Andre (March 26, 2010). "BMG Rights Management to Acquire Cherry Lane". billboard.com. Retrieved January 10, 2018.
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  40. ^ Stahr, Volker S. (May 6, 2001). "Das stille Konzert der großen Fünf". Berliner Morgenpost (in German). p. 17.
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  42. ^ "EU-Kommission: Universal darf EMI unter Auflagen übernehmen". focus.de (in German). September 21, 2012. Retrieved January 10, 2018.
  43. ^ Christman, Ed (December 21, 2012). "BMG Acquires Mute Records Catalog". billboard.com. Retrieved January 10, 2018.
  44. ^ Chmielewski, Dawn C. (February 14, 2013). "Universal Music agrees to sell Sanctuary Records". Los Angeles Times. Archived from the original on February 15, 2013. Retrieved February 15, 2013.
  45. ^ Roxborough, Scott (December 21, 2012). "BMG Buys Virgin, Famous Music Catalog From Sony/ATV". hollywoodreporter.com. Retrieved February 25, 2019.
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  54. ^ Christman, Ed (November 17, 2014). "Vagrant Records Bought by BMG Chrysalis". billboard.com. Retrieved October 1, 2018.
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  62. ^ "Bertelsmann setzt auf Brasilien". Börsen-Zeitung (in German). March 21, 2014. p. 11.
  63. ^ Christman, Ed (April 28, 2016). "Warner Music's Global Deal for BMG's Sets up Showdown with RED". billboard.com. Retrieved January 10, 2018.
  64. ^ Ingham, Tim (April 19, 2016). "Warner Signs BMG Deal for Exclusive Worldwide Distribution of Catalogue". musicbusinessworldwide.com. Retrieved January 10, 2018.
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  70. ^ a b Bialek, Catrin (January 31, 2017). "Musikrechte: Bertelsmann goes Country". handelsblatt.com (in German). Retrieved January 10, 2018.
  71. ^ "BMG Beats Majors to Acquire Jason Aldean Label Broken Bow". musicbusinessworldwide.com. January 30, 2017. Retrieved January 10, 2018.
  72. ^ "Alistair Norbury shares his vision for Tag8 Music - BMG's first UK label launch in 13 years".
  73. ^ "BMG and LME launch new label Tag8 with albums from Blue, Pixie Lott and Roachford".
  74. ^ "UK: BMG and LME launch new label Tag8 with albums from Blue, Pixie Lott and Roachford". November 2, 2022.
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  76. ^ "Heart & soul | full Official Chart History | Official Charts Company". Official Charts.
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  78. ^ "BMG FORMS ALLIANCE WITH UNIVERSAL MUSIC GROUP; PLANS TO MOVE PHYSICAL DISTRIBUTION TO UMG'S COMMERCIAL SERVICES DIVISION". musicbusinessworldwide.com. October 19, 2023.
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  88. ^ Gensler, Andy (April 4, 2017). "BMG Publishes First Book With "The Odessey: The Zombies in Words and Images"". billboard.com. Retrieved January 10, 2019.
  89. ^ "Publishing". BMG. October 2015. Retrieved January 10, 2019.
  90. ^ Parisi, Paula (October 23, 2017). "BMG Production Music Expands With Acquisition of Movie Marketing Mainstay". Archived from the original on March 5, 2018. Retrieved March 22, 2018.
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