CEO of BMG Thomas Cosfeld says his company's takeover of in-house digital distribution and operational changes — two initiatives launched during his first year at the helm — are paying off.
The Berlin-based music company said on Wednesday (August 28) that it generated revenue of 459 million euros ($491.7 million) in the first half of 2024, up 11.1 percent from the year-ago period thanks to strong growth in digital income streams. Digital revenue, which contributed nearly 70% of BMG's total revenue for the period, rose 20.3% in the first half of 2024 compared to 2023 as BMG exited a contract with Warner Music Group ( WMG) and transferred oversight of digital distribution activities. home.
“This move is paying off,” says Coesfeld Bulletin board to take control of BMG's 80 billion digital streaming business. BMG now has greater insight into its streaming data, which allows it to provide “better marketing insights, more timely campaign and repeats of that campaign [and] better tools around fandom” to its artists, which include Jelly Roll, Kylie Minogue and Mustard, Coesfeld says. Also, BMG saves money by not paying fees to WMG's ADA.
“A year or two ago we had this plan, we said this is going to happen,” Coesfeld adds. “And [these earnings] show it works.”
BMG's first-half organic revenue rose 12.5%, while operating earnings before interest, taxes, depreciation and amortization (EBITDA) – a closely watched measure of growth – rose 35.5% to 122 million euros (130.7 million dollars). EBITDA margin was 26.5%, up from 21.7% in the first half of 2023. BMG's catalogs again supported this margin, as the company acquired 10 catalogs in the first half of the year. Details of those deals were not disclosed.
The close of the first half of 2024 coincided with the end of Coesfeld's first year as CEO. After taking over the reins of BMG from a long-time CEO Hartwig Masuch On July 1, 2023, Coesfeld set a tone that says BMG is open to change, even if it means tapping into artificial intelligence and partnering with arch-rivals.
“We realized that only by predicting the trends a little earlier will we have a chance to win in this very competitive market,” says Coesfeld. “We are looking at a fundamentally attractive market that is growing. It's driven by technology and if we embrace it and don't fight it, there's a huge opportunity for BMG and artists.”
An example of this approach is BMG's collaboration with a productive artificial intelligence lab at the Technical University of Munich, through which they have successfully launched a pilot program using gen-AI to market BMG's deep catalog. Students in the workshop created short videos that have proven to be more cost-effective and effective in getting audiences engaged with music.
Last fall, BMG also began a structural reorganization that included laying off about 40 employees. It was a “tough period … but a business necessity” and part of a broader strategy aimed at helping the company respond quickly to industry trends, Coesfeld says.
“The operational changes we have implemented – digital distribution, better monetization of our repertoire and catalogs, and our reorganization, which has been completed, make us much more flexible and faster in our service delivery and decision-making” , he adds. “We're much more flexible every day.”
