BMG saw its half-year revenues grow 9% YoY at constant currency to €296 million ($357m) in the six months to end of June.
That represented the music rights company’s best-ever midyear performance since it was formed in 2008.
The €296 million haul – up 5.2% on a reported basis – represented a €14 million jump on the €282 million that BMG generated in the same six-month period of 2020.
62.9% of BMG’s revenues in the first half of 2021 were from publishing, with 37.1% from recordings.
BMG’s operating EBITDA reached €50 million ($60m) in H1 2021. That was up 7% at constant currency (or 3.1% on a reported basis) on the €49 million EBITDA the firm posted for the same period in 2020.
Over half of BMG’s revenues in the first half of 2021 came from the United States (€160 million). The UK was its second biggest territory (€45m) followed by Germany (€19m).
These numbers were confirmed by BMG and parent Bertelsmann today (August 31).
That partnership, says BMG, has now completed its first acquisition, with four more catalog buys now in due diligence.
BMG also confirmed that its KKR partnership is currently working on 71 pipeline deals – which may or may not reach completion – at a combined value of over €1 billion.
In an internal note sent to BMG staff today and obtained by MBW, the music company’s CEO, Hartwig Masuch, called his firm’s half-year numbers “a ringing endorsement of our clients, our strategy and, importantly, of you”.
Said Masuch of the H1 2021 period: “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 [in H1 2021] we outperformed the market in both digital and physical in each of our three core markets of the US, UK and Germany.
“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.”
Hartwig Masuch, BMG
“Amidst a pandemic, however, financial measures should not be the only focus. Artists and songwriters are hurting, awareness of injustice and discrimination are at an all-time high and the BMG team continues to work under extraordinary conditions.
“At this time, more than ever, we should focus on how we behave and what we stand for. Happily, here too the results are truly extraordinary.”
Added Masuch: “We continue to lead the drive for justice for artists and songwriters and continue to take concrete steps to address historic unfairnesses. Expect more measures to come.
“We also lead the market in our respect for and focus on proven and established artists with recent signings such as Duran Duran, Santana, Bryan Adams and Soft Cell. More and more of these artists are coming to us by word of mouth. You cannot buy the endorsement of some of the biggest artists in the world – it is their response to the reality of BMG service which leads them to recommend us to their friends.”
Masuch confirmed that BMG “avoided lay-offs” during the past 18 months, and that BMG’s global headcount is now 1,000-strong worldwide. Some 255 staff joined BMG during the pandemic period, he said.
“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).”
Masuch commented: “The music business continues to change rapidly. Our challenge is to remain one step ahead of that change. We were correct in our view that in a streaming world music companies needed to abandon their old ways (hence our fairness agenda).
“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.
“That spirit, BMG’s DNA, does not sit on the Bertelsmann balance sheet. It is not a financial measure. It is you and me and all of us and our passion to do our very best for artists and songwriters. It is our greatest strength.”
During the half-year 2021 period, BMG released flagship new recordings by AJR and Parmalee & Blanco Brown in the US, by No Angels and Kontra K in Germany, and by KSI and Gary Numan in the UK.
Key signings for its recordings business included Louis Tomlinson, No Angels and Duran Duran.
For BMG’s publishing business, albums by DJ Khaled in the US and Ufo361 and Helloween in Germany topped the charts.
The Scorpions and Robin Schulz renewed their publishing contracts, while Max Giesinger added publishing to his recordings deal.
In addition, during H1 2021, Netflix inked a long-term, exclusive deal with BMG to manage its music publishing rights outside the US. BMG also partnered with gaming platform Roblox to develop new opportunities for artists and songwriters.Music Business Worldwide