Germany-headquartered music company BMG and Universal Music Group (UMG) have formed a new alliance. The companies say that they will “explore a range of collaborative initiatives to further expand opportunities for BMG-signed artists around the world”.
The first project under the new alliance will be moving the distribution of physical formats of BMG’s music – including vinyl and CD for thousands of BMG-signed artists – to UMG’s Commercial Services division.
UMG’s Commercial Services division has operations in 60 countries covering more than 200 markets.
News of the BMG x UMG alliance follows last month’s news, first reported by MBW, that under CEO Thomas Coesfeld, BMG will later this year reclaim its digital distribution rights from current distribution partner Warner Music Group.
Bertelsmann-owned BMG subsequently plans to handle its own distribution to streaming and download services for its recorded music repertoire.
As reported at the time, the company’s physical recorded music distribution partnership with Warner/ADA will come to an end next year, after which BMG is expected to transfer its CD and vinyl distribution contract to another partner.
BMG confirmed today (October 19) that the transition of its physical products to UMG is expected to commence in the second quarter of 2024 and will be fully transitioned by the end of 2024.
Meanwhile, BMG says that other collaborations with UMG are already under discussion, from “exploring shared positions on industry matters to joining forces in adjacent business lines”.
BMG’s recordings catalog comprises around half a million tracks and the work of artists including Kylie Minogue, Jelly Roll, Lainey Wilson, AJR, Jason Aldean, Rick Astley, Black Sabbath, Buena Vista Social Club, Cro, 5 Seconds Of Summer, Max Giesinger, Andy Grammar, George Harrison, Iron Maiden, The Kinks, Dustin Lynch, Mecano, Mötley Crüe, Motörhead, Nena, Rita Ora, Louis Tomlinson, and many others.
The company reports that its recorded music business has tripled its revenues over the past seven years, “and is currently enjoying its most successful period yet with strong performances” from artists including Jelly Roll (Whitsitt Chapel), Kylie Minogue (Tension), Rita Ora (You & I) and Lainey Wilson (Bell Bottom Country) and with releases to come from artists including Jason Aldean, Jennifer Lopez, Chief Keef, Spiritbox and Mötley Crüe.
Today’s news arrives three months after Thomas Coesfeld became the company’s new Chief Executive Officer.
In an interview with the newspaper Handelsblatt on Monday (October 16), he revealed that BMG expects to spend “a similar” amount on catalog acquisitions in 2023 as it did last year.
BMG spent USD $400 million on catalog acquisitions in 2022.
As MBW reported back in March, Bertelsmann’s latest annual fiscal report revealed that BMG spent a record USD $535 million (EUR €509m) on the acquisition of music catalogs plus artist signings (i.e. advances) last year.
Within that $535 million figure, confirmed Bertelsmann, BMG spent $400 million (€380m) on acquiring music catalogs globally in 2022 – more than even Universal Music Group spent on catalog acquisitions in the same period.
Coesfeld further told Handelsblatt in the interview published Monday: “It is my job to lead [BMG] into the future. The next chapter of the music industry will look completely different.”
“Our alliance with UMG is a significant step to further enhance our service to BMG-signed artists.”
Thomas Coesfeld, BMG
In making the new announcement, BMG CEO Thomas Coesfeld said: “Our alliance with UMG is a significant step to further enhance our service to BMG-signed artists.
“We are delighted to partner with UMG, the world leader in music-based entertainment on our thriving physical recorded music business. Their scale, technology and commitment promises to further expand opportunities for BMG-signed artists around the world.”
“BMG has brought a fresh vision to the music business, and we look forward to partnering with BMG on a variety of initiatives to provide greater opportunities to artists and our respective companies.”
Sir Lucian Grainge, Chairman and CEO of Universal Music Group, added: “BMG has brought a fresh vision to the music business, and we look forward to partnering with BMG on a variety of initiatives to provide greater opportunities to artists and our respective companies.”
Music Business Worldwide
