The performance of music rights company BMG was a highlight of parent Bertelsmann‘s results in 2014, as the German media giant’s sales grew 3.1% to reach €16.7bn.
BMG revenues are understood to have increased 20% in the year to over €300m, boosted by acquisitions including the Skint/Loaded and Infectious labels in the UK, as well as catalogue marketing specialist Union Square Music.
Further strategic acquisitions in the year included Dutch music publisher Talpa Music in the Netherlands, US label Vagrant Records plus the Hal David catalogue in the US.
Bertelsmann named “further catalogue acquisitions” at BMG as a key part of its growth strategy for 2015.
CEO Thomas Rabe praised the music company as a “major contributor to earnings growth” alongside German-language TV network RTL Deutschland.
“Just six years after launch, BMG can compete with the most established industry players.”
Hartwig Masuch, BMG
BMG’s contribution to Bertelsmann’s bottom line was particularly improved due to the transition of being fully-owned by the company. Bertelsmann completed its buyout of KKR’s share in 2013.
However, Bertelsmann also said that BMG’s sales grew organically in 2014.
Bertelsmann’s operating EBITDA was up 2.7% to €2.37bn in the year – its highest since 2007 – but net profit fell 35% to €573 million.
The German group pinned the fall on the downscaling of its print and direct-marketing businesses – particularly the merging of Penguin Random House – as well as a tax adjustment in the Hungarian television industry which it hopes will be rectified this year.
BMG now holds 2.5 million music rights, including 600,000 master rights. The company represents 70,000 songwriters and artists.
Bertelsmann praised the music company’s efforts in Germany, where it noted that “BMG was the most successful music publisher of the year”.
“We have demonstrated definitively that just six years after launch, BMG can compete with even the biggest and most established industry players,” said BMG CEO Hartwig Masuch.
[Pictured: BMG publishing client Bruno Mars]Music Business Worldwide
