BMG is taking direct control of its streaming business after revenues tripled, in a strategic move that follows the company parting ways with distribution partner, Warner Music Group’s ADA.
BMG, the world’s largest international music company after the Big Three, is taking direct control of its 80 billion stream digital business in the most significant change to its recorded music strategy in the company’s history. The move comes after BMG and its current distributor, Warner Music Group’s ADA, agreed to part ways, which enabled both companies to focus on growing their businesses and margins.
The change will see a phased insourcing of distribution to all major streaming platforms, beginning at the end of this year with Apple Music and Spotify. BMG will continue outsourcing physical distribution in a new deal expected to be announced soon.
“This is a new chapter for BMG and marks a significant milestone for the music industry more generally as BMG becomes the first new global-scale full-service music company to emerge in the past two decades (that) controls its key routes to market,” BMG CEO Thomas Coesfeld (pictured) relayed to DMN.
“Taking direct control of our relationships with streaming services is a major leap forward in our mission to offer artists the most effective and efficient service. The new setup will enable us to better market, service, and advise our great artists and will further improve BMG’s relationship with key digital and physical partners.”
BMG’s recordings catalog comprises around half a million tracks, including the work of artists like Jason Aldean, Rick Astley, Black Sabbath, 5 Seconds of Summer, Andy Grammer, George Harrison, Iron Maiden, The Kinks, Kylie Minogue, Jelly Roll, Dustin Lynch, Mecano, Mötley Crüe, Motörhead, Nena, Rita Ora, Louis Tomlinson, Lainey Wilson, and many more.
“There are many advantages to third-party distribution in the early years of a new music company, but with BMG’s annual streaming rate in excess of 80 billion streams this year, it is time to unleash the benefits in terms of market insight and leveraging data that going direct will bring. This will enable us to be a better partner to our artist and songwriter clients and to digital services,” said BMG Chief Operating Officer Sebastian Hentzschel.
“We’ve always known that going direct on streaming was BMG’s ultimate objective, and we’re proud to have helped them grow to the scale where they could achieve it,” adds Warner Music Group CEO Robert Kyncl. “Taking this step will mean we create more space for ADA to focus on developing new partnerships and for WMG to continue to grow our investment behind artists, songwriters, and labels. We wish BMG all the best and know that we will have many other opportunities for successful collaboration.”
Thomas Coesfeld paid tribute to Warner Music Group’s independent label services and distribution company ADA, BMG’s former distribution partner: “We are very grateful to Warner Music Group and ADA for their trustful partnership. With their help, we have tripled our recorded business over the past seven years.”