BMG: We’ll leave US market share fixation to ‘flawed’ major labels


BMG might have just scored its first ever No.1 album as an independent record company in the US, but you won’t catch it obsessing over market share.

The music rights company was reborn in 2008 after selling off its old masters catalogue to Sony.

Last week, shortly after its official seventh anniversary as an independent, the BMG-issued Unbreakable by Janet Jackson hit No.1 on the Billboard 200 – with 116k equivalent album sales and 109k actual album sales.

The news came one month after another milestone for the firm’s recorded music division in the States, when Iron Maiden’s The Book Of Souls sold more than 75,000 copies to hit No.4 on the Billboard 200 – the biggest opening week for a Maiden LP in Nielsen Soundscan history.

Jon Cohen heads up BMG’s Stateside recorded music operation, having joined as part of the acquisition of his Vagrant Records late last year.

Cohen acknowledges that BMG’s masters business is some way behind the scale of its music publishing operation, which boasts control of just under 2m copyrights.

But right now, records seems to be the priority – with a belief that no competitor is unbeatable.

“There are some inherent problems at the majors. BMG offers a different way to do business. Market share is barely in our vocabulary.”

Jon Cohen

Cohen tells MBW: “There are some amazing executives at major labels; I’m friends with a number of them and greatly respect what they do. But BMG is a company that’s been built from the ground up to deal with the evolution of the music industry.

“There’s some inherent flaws in the software at the majors. As Hartwig [Masuch, BMG CEO] says: ‘You can’t fix a plane that’s already in the air.”

Adds Cohen: “We’re not driven by the same mandates as a major label. Market share is barely in our vocabulary.

“As we’re showing with Janet, this is a different way to do business; one which says a record campaign is not about an 8-12 week window at radio – it’s about an 18-month-plus plan.”

As well as praising BMG’s technology, Cohen says that the reason superstars like Janet Jackson have begun to embrace the firm’s recorded music infrastructure is largely down to its flexibility.

Jackson’s Unbreakable was issued on the star’s own Rhythm Nation label, using BMG as a services partner for marketing, promotion and other duties.

BMG are reported to have laid down $500,000 in recording costs for Unbreakable.

As such, this was one of the biggest ‘self-released’ albums in history, with a global marketing push.

Unbreakable charted higher than Jackson’s previous studio, 2008’s Discipline – another US No.1, on UMG‘s Island – in the likes of Canada (No.1), the UK (No.11) and Australia (No.11).

(Disciple has sold in excess of 450,000 units in the US to date.)

“We have a menu of deals to offer artists,” comments Cohen. “It’s not just about ‘artist services’ here: we tailor-make various kinds of deal for the comfort level of the artist with absolute collaboration and transparency, and the muscle of a true record label.”

But how big is that muscle?

BMG prides itself on offering ‘sensible’ deals; often handing the artist some shared financial risk and a realistic expectation of recouping.

So, if it came to the crunch, if it really wanted to land a big fish, could BMG compete with the majors on the biggest cash-rich advance deals?

Replies Cohen: “Absolutely. If the deal is right, of course. It’s no secret that BMG and [owner] Bertelsmann have vast resources.

“But as opposed to who can write the biggest cheque, we always start with the complexion of the deal. I’m not sure the majors do that.”

“We can absolutely compete with the majors on [cash-rich advances]. But as opposed to who can write the biggest cheque, we start with the complexion of the deal.”

Jon Cohen

Yet even the majors have become less rigid in their deal-making in recent years, offering increasing numbers of licensing, services-based or profit-share deals – especially to more established artists.

“I think those are always fallback positions for the majors from their standard [perpetuity] deal,” counters Cohen.

“BMG takes the opposite approach; we say: ‘What is the most important deal for you? What is your goal?’

“If it’s a big advance, we can discuss it. But all deals should be about total collaboration and total transparency. That’s where we start, and then we work backwards.”

The chart-topping Janet Jackson campaign is a case study in another particular strength of BMG’s – the close-knit collaboration between its recorded music and publishing teams.

Jackson first signed to BMG as a songwriter. Her signature was secured by Zach Katz, Chief Creative Officer at the US arm of the company.

“There are no walls between publishing and recorded music at BMG – both from an executive and a sync standpoint,” says Cohen.

“We have a 75-person sync staff worldwide. There is a ‘one for all’ mentality at BMG.

“While majors can be flexible on deals, I think there’s some that are still insistent on 360 rights and other things. At BMG you get total devotion to artist development.”

In the case of Jackson, the top publishing A&R priority was to give star co-writers Jimmy Jam and Terry Lewis support and creative freedom – a strategy which Cohen believes resulted in “a really organic Janet record”.

This symbiosis between publishing and records, says the exec, will only become more of an asset as time goes on.

“I have access to some of the best A&Rs in the business, from our [label team] to Zach Katz and his team on the publishing side,” he says.

“We represent some of the best writers across pop, rock and more, and they can be at our disposal to [collaborate with artists] on the recorded music side. That’s unprecedented.

“We represent some of the best songwriters, and they can be at our disposal to [collaborate] on the recorded music side. That’s unprecedented.”

Jon Cohen

“There’s no other situation like it in the industry. Several of our sophomore records due for release next year have really benefited.”

Cohen admits that the major record companies still hold one ace over every independent in America – their promotions horsepower when it comes to pop radio.

But he says radio promotion in general is becoming a “level playing field” in the States, particularly at Alternative, Triple-A and Hot AC – and that independent pluggers are now beginning to rival the majors for influence on pop networks.

As for ‘urban’ stations, the majors’ stranglehold has clearly loosened: Janet Jackson’s No Sleep has spent seven weeks on the top spot of the Urban AC radio chart in the US.

Despite this success, Cohen says BMG is determined to position Unbreakable as a “fantastic body of work, rather than all about one single or another single”.

He adds: “If you fit directly into the major label pop model – the 12-week model of a single – and are happy to have your entire career determined on that basis on research, there’s something to be said for it.”

There’s a compliment so backhanded, you might have to duck in order to avoid a slap.

Cohen expresses his excitement about BMG not just dealing in experienced artists, but bringing through new talent too.

Over 19 years at Vagrant, he notes, his team developed the likes of Dashboard Confessional, Edward Sharpe & The Magnetic Zeroes and The 1975 “from zero to half a million [sales] and up”.

“We’re in the development game here today – that’s part of the portfolio at BMG.”

As for future No.1 albums in the US market?

Probably not this year, says Cohen, as focus begins to turn to new releases in 2016 – as well as maximising the long-term commercial exploitation of Jackson’s Unbreakable, the star’s seventh LP to top the Billboard 200.

“I’m ecstatic for Janet and obviously for BMG,” he adds. “This No.1 was no small feat and it took a huge amount of teamwork to get it there.

“Most importantly it shows that Janet Jackson, who’s had one of the most important careers in pop history, is still as relevant in 2015 as she has been in any decade.”Music Business Worldwide

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