BMG buys Germany’s largest independent label, doubling its recorded music revenues in territory

Credit: Frederike van der Straeten
Maximilian Kolb_and Ken Otremba

BMG has agreed a deal to acquire Germany’s largest independent record label, Telamo, a specialist in Schlager music.

Sources tell MBW that the acquisition will approximately double BMG’s annual recorded music revenues in Germany, the world’s fourth largest music market.

According to figures published in BMG parent Bertelsmann‘s annual report earlier this year, BMG generated EUR €40 million in Germany in 2021, across both its recorded music and music publishing operations.

Recordings account for around half of BMG’s revenues in Germany.

BMG’s combined recorded music market share post-Telamo acquisition will be 8.5% in Germany, says the company, creating “one of the largest German label divisions across all genres”.

BMG isn’t being drawn on the cost of the Telamo deal, but it did confirm in a release today (August 3) that the transaction is “BMG’s largest label investment since the acquisition of Nashville-based independent country music powerhouse BBR Music Group in 2017”.

That BBR acquisition cost BMG just over USD $100 million, suggesting that the acquisition price of Telamo is comfortably into the eight figures.

Since that Broken Bow deal, BMG has acquired labels such as World Circuit Records, home to Buena Vista Social Club.

BMG’s latest acquisition includes not just Telamo and its labels, but also digital offering Schlager für Alle, which has over 1.7 million users via Facebook, Instagram, YouTube, and TikTok.

The transaction is subject to the approval of the Austrian Federal Competition Authority.

Subject to that approval, the acquisition is expected to close by the end of August.

Eight of Germany’s Top 25 Schlager/Deutschpop artists are signed to Telamo. Best-selling artists include Giovanni Zarrella, Eloy de Jong, Marianne Rosenberg, Ross Antony, Die Amigos, Thomas Anders and Florian Silbereisen, Daniela Alfinito, and Fantasy among many others.

Telamo was founded in 2012 by Kathleen Herrmann, Ken Otremba, and Marko Wünsch.

All 29 employees as well as Managing Director Ken Otremba, will remain with the company.

Telamo will continue to maintain its offices in Munich and Berlin. Kathleen Herrmann and Marko Wünsch will continue to act as consultants for Telamo.

Maximilian Kolb, BMG, EVP Repertoire & Marketing Continental Europe, said, “Over the course of the past ten years,

“Telamo has skillfully taken Schlager into the digital age. We are thrilled to welcome Telamo’s wonderful artists and of course its team. BMG and Telamo share the same values of respect for artists. The combination of the two of us will have a major impact on the German language music market.”

Telamo founder Ken Otremba said, “Since our inception, our goal has been to create the optimal and most modern conditions for our artists. We are proud and excited now to welcome our artists to a brand-new chapter. Telamo will maintain its previous partnerships but will now offer access to more opportunities – both domestic and international.”

“This transaction redraws the map of the German music industry, creating a new force outside the traditional business.”

Dominique Casimir, BMG

Kathleen Herrmann said, “As founders of Telamo we are convinced the best future for the company is in collaboration with BMG. We very much look forward to working with the BMG team and the wider BMG network.”

Entrepreneur Marko Wünsch of German consulting and technology company Artcom said, “We have been working together with Bertelsmann companies for 25 years now.

“BMG were the first to help us release products. The first artist was Elvis Presley, followed by Ronny – still a longtime seller today.

“With Ken, formerly with BMG Ariola, and Kathleen we helped grow artists’ careers including Fantasy. We know each other well and we know that the new BMG is the right partner for our future.”

BMG’s Chief Content Officer Dominique Casimir said, “This transaction redraws the map of the German music industry, creating a new force outside the traditional business.

“We anticipate strong synergies both within the Bertelsmann Group and with our international businesses.”

With a 15% market share in Germany, Schlager – often described as the German market’s answer to country music – is the most popular genre in the territory after pop/pop rock (33%), followed by rock/hard rock/heavy metal (13.9%), pop oldies (9.4%) and dance/electro (8.6%).

Since re-entering the recordings market in Germany, BMG has scored success with artists including Max Giesinger, Kontra K, LINA, Stefanie Heinzmann, Nils Frahm, Adel Tawil, Anna Loos, Cypress Hill, Trettmann and Kitschkrieg.

In the period between 2009 and 2017, BMG acquired record companies including Sanctuary, Union Square, Mute, Vagrant, Infectious, Rise, RBC and BBRMG.

BMG CEO, Hartwig Masuch, indicated last month that BMG parent Bertelsmann could invest as much as USD $1 billion in 2022 to fund BMG’s acquisition of music catalog rights.

That news followed two significant catalog acquisitions in less than a week by BMG: Simple Minds and now Jean-Michel Jarre.

in 2022 so far, BMG’s 30 catalog rights acquisitions have also included Primal Scream, John Lee-Hooker and more.

According to local trade body BVMI, Germany’s recorded music industry generated more than USD $2 billion for the second straight year in 2021.

BVMI reports that the German market’s revenues from physical music sales and streaming generated a total of €1.96 billion last year (approximately $2.2bn), an increase of 10% year-over-year compared to 2020.Music Business Worldwide