BMG Reports Strong ‘Organic’ Growth
Bertelsmann’s indie music subsidiary BMG marked its 10th year in 2018 with significant growth in revenue and profits. BMG reported that overall revenue for 2018 was up by 7.5 % to €545 million / $613 million USD.
BMG attributed the revenue to “organic growth” and noted the benefits of the expansion of its recordings business, which grew strongly during the reporting year.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) margin rose to 22.5% for 2018, up from 20.5% in 2017, while operating income was up by 17.3 percent to €122 million (vs. €104 million in 2017), boosted by the increase in revenues and economies of scale.
BMG’s fortunes were buoyed by a roster that includes Lil Dicky, Jason Aldean, Kylie Minogue, The Prodigy and Kontra K, who all scored with number-one albums or singles in 2018. As well, BMG signed new contracts with artists including Dido, Marianne Faithfull, Lenny Kravitz, and Adel Tawil during the period.
In the music publishing business, world tours by artists including Roger Waters and The Rolling Stones led to higher collections and the division was further bolstered by administration of the Fremantle music catalog.
Keith Richards, whose publishing interests have been represented by BMG since 2013 along with Mick Jagger’s, additionally signed a worldwide contract for his solo recordings. Among the most prominent music publishing signings for BMG in 2018 were Ringo Starr and JuiceWRLD, while Lenny Kravitz and Yusuf a.k.a. Cat Stevens renewed their contracts with the company. In all, BMG songwriters contributed to three of the five biggest summer hits on US radio.
During 2018, BMG acquired the world music label World Circuit Records and the US hip-hop and rap label RBC Records.
“2018 was a successful business year for Bertelsmann. We became a faster-growing, more digital, and more international Group. Organic growth is higher than it has been for years, and nearly half of our revenues came from digital activities. Both of these factors demonstrate how far we have come with the Group’s transformation,” said Bertelsmann Chairman and CEO Thomas Rabe.