BMG was founded in October 2008 afterBertelsmann sold its stake inSony BMG toSony.[5] From 2009 to 2013, the investment firmKKR held 51% of the company, which became one of the world's largest music publishers during that time.[6][7] BMG is 100% owned by Bertelsmann and one of the group's eight business divisions.[8]
In the 1950s, Bertelsmann entered the music business when it added music to its book club.[9]Ariola, a record label, was launched andSonopress, a pressing plant, was established.[10][11] In 1975, Ariola opened an office in the United States.[12] Bertelsmann acquiredArista Records in 1979 and half ownership ofRCA Records in 1985, thereby becoming one of the world's largest music companies.[13] After the full acquisition of RCA Records in 1987, Bertelsmann's various subsidiaries were brought together to formBertelsmann Music Group (BMG), which covered a number of genres, includingfolk,pop, and especiallyclassical music.[14]
In response to declining sales in the overall music market, Bertelsmann agreed to merge its record label interests withSony in 2003; the company was called Sony BMG.[15][16] Furthermore, in 2006, Bertelsmann sold its subsidiary BMG Music Publishing toUniversal Music Group.[17][18] Having reached the conclusion that established music publishing companies and record labels were not appropriate for an increasingly digital music business, Bertelsmann sold its stake in the Sony BMG joint venture in 2008.[19] The company was subsequently renamedSony Music Entertainment.[20]
In October 2008, Bertelsmann launched the new BMG with a small portfolio of recorded music rights of around 200 artists it retained from Sony BMG.[3][21] It declared it would pursue a business model focused on fairness, service and transparency.[4][22]
The launch of the new BMG came amidst the 2008 financial crisis, and within two weeks of the collapse ofLehman Brothers.[23][24] Since Bertelsmann could not supply the required funds on its own, a 51% stake was sold to financial investorKKR in 2009.[25][26][27] Bertelsmann retained 49% and the right to appoint the company's management.[28] The transaction allowed BMG to increase its equity ratio.[26]
Initially, Bertelsmann had announced that the new BMG would focus on the European broadcast market. After KKR became the majority shareholder, the company set its sights on expanding internationally.[29][30] A key step towards achieving this goal was acquiringCherry Lane Music Publishing in 2009, which provided BMG with its first foothold in the United States.[31][32][33][34] BMG made several other purchases in 2010, includingEvergreen Copyright Acquisitions.[35][36]
In 2013, KKR sold its stake in BMG to Bertelsmann,[46] making it the sole shareholder of the company.[47] Under the leadership of Chief Executive OfficerThomas Rabe,[48][49] who had been a key driver of BMG's expansion during his time as Chief Financial Officer,[31] Bertelsmann again cited music as one of its strategic growth areas.[50]
In 2013, the company began to represent rights to songs byRobbie Williams and theRolling Stones.[51][52] Record labels were also added to the portfolio including Union Square Music (distributor ofUniversal Music'sZTT Records andStiff Records),[53] Vagrant Music and Infectious Music (2014),[54][55] as well asS-Curve Records[56] andRise Records (2015).[57] Other acquisitions followed in 2016, including the labelARC Music and the catalog ofThe End Records.[58][59] By acquiring Basement, BMG entered the market in Brazil,[60] one of Bertelsmann's growth regions.[61][62] In 2016, the company also signed an agreement with Warner Music'sAlternative Distribution Alliance for the physical and digital distribution of music,[63] allowing BMG to consolidate its longstanding sales structures.[64] BMG further expanded by entering the Chinese market in cooperation withAlibaba, allowing the online company to distribute the work of musicians and composers via its web channels while securing copyrights.[65]
In the 2015 financial year, BMG was part of the Corporate Investments division at Bertelsmann.[66] In 2016, the media group turned the subsidiary into a stand-alone division.[8] Today, BMG is considered a prime example of how growth platforms are created and leveraged at Bertelsmann.[67][68]
In 2017, BMG announced the purchase ofBBR Music Group,[69] including the labels Broken Bow Records, Red Bow Records, Stoney Creek Records, Wheelhouse Records and the music publisher Magic Mustang Music.[70] With a value of more than 100 milliondollars, the transaction was the largest recorded music acquisition in the company's history.[71] BMG thus improved its position in thecountry music segment and ensured its long-term presence in theNashville music industry and its overall impact on the United States market.[70]
In 2022, BMG announced its first new British record label within the group since 2009, Tag8 Music.[72][73][74] This label was set up in association with ex-Bros memberCraig Logan and his management company Logan Media Entertainment, with Tag8 Music featuring established acts such as Pixie Lott, Roachford, and Louise Redknapp as part of its roster. On the Official Albums Chart of 4 November 2022, the label charted its first hit album in the form of Blue'sHeart & Soul.[75][76][77]
In October 2023, BMG signed withUniversal Music Group for physical distribution, and started self-distributing its own catalog on digital platforms, thus ending their partnership with Warner Music.[78] The transition of physical distribution to Universal took place over the course of 2024, and the change was completed later on October 2024.
BMG's parent enterprise is BMG Rights Management GmbH, alimited liability company according to German law. The company's objective is "the marketing of music, as well as its development and delivery" for use in media, at concerts and for other purposes.[79] BMG has numeroussubsidiaries andshareholdings, for example, BMG Rights Management (Europe) GmbH.[80] In addition to Germany, BMG is present in Australia, Brazil, China, France, Italy, Spain, the UK, the Benelux countries, the United States, Canada, and Scandinavia.[81]
In the 2018 financial year, BMG posted revenues of €545 million. Rights and licenses accounted for 91.1% and products and merchandise 8.9%. Almost half of its revenues (44.1%) were generated in the United States. Other important markets were the United Kingdom (24.7%), Germany (6.3%) and France (3.9%).[84]
BMG offers musicians the services generally provided by music publishers and record labels.[3] Unlike its major competitors, it runs them under the same roof and on the same technology platform.[85][86][87] More recently, it has added film, television, and books to its roster of services.[21][88]
BMG has a significant library ofproduction music (library music), for use in films, television, advertising, and other media. These catalogues include MusicDirector (part of Talpa Music), Human Music, Music Beyond, X-Ray Dog, Beds & Beats, Valentino Production Music,Immediate Music,[90] AXS Music,[91] Altitude Music, and Must Save Jane.[92]
^abRenner, Kai-Hinrich (March 23, 2016). "Bertelsmann sortiert sich neu".Handelsblatt (in German). p. 24.
^175 Years of Bertelsmann: The Legacy for Our Future. Munich: C. Bertelsmann Verlag. 2010. p. 27.ISBN978-3-641-05407-6.
^"Bertelsmann feiert: Heute wird der Medienkonzern 175 Jahre alt".Westfalen-Blatt (in German). July 1, 2010.
^"Superstar und Freund der Mohns".Neue Westfälische (in German). December 23, 2014. p. 3.
^Mohn, Reinhard (2008). "Von der Welt lernen: Erfolg durch Menschlichkeit und Freiheit" (in German). Munich: C. Bertelsmann Verlag.ISBN978-3-570-01110-2.
^"Musikkonzerne auf Chancensuche".Tiroler Tageszeitung (in German). October 14, 2000.
^175 Years of Bertelsmann: The Legacy for Our Future. Munich: C. Bertelsmann Verlag. 2010. p. 48.ISBN978-3-641-05407-6.
^"Bertelsmann und Sony machen gemeinsam Musik".Der Tagesspiegel (in German). November 7, 2003. p. 21.
^"Elefantenhochzeit in der Musikbranche".Wiener Zeitung (in German). December 15, 2003. p. 14.
^"Musikverlag BMG geht an Vivendi".Wiener Zeitung (in German). September 7, 2006. p. 26.
^"Bertelsmann treibt Schuldenabbau voran".Handelsblatt (in German). December 28, 2006. p. 18.
^Strohmaier, Brenda (August 6, 2008). "Bertelsmann steigt bei Sony BMG aus".Die Welt (in German). p. 12.
^ab"Bertelsmann setzt auf Vermarktung von Rechten" (in German). Schweizerische Depeschenagentur. October 14, 2008.
^Krause, Martin (October 15, 2008). "Der Künstler ist König: Bertelsmann steigt mit neuer Firma wieder ins Musikgeschäft ein".Neue Westfälische (in German).
^Siebenhaar, Hans-Peter (November 12, 2008). "Konjunktur bremst Bertelsmann".Handelsblatt (in German). p. 16.
^Grabitz, Ileana (March 4, 2013). "Wie Bertelsmann wieder Musikriese werden will".Die Welt (in German). p. 14.
^"Bertelsmann: Duett mit Heuschrecke".Der Tagesspiegel (in German). July 9, 2009. p. 20.
^abKnappmann, Lutz; Rungg, Andrea; Ohler, Arndt (July 9, 2009). "Bertelsmann paktiert mit Investor KKR".Financial Times Deutschland (in German). p. 8.
^Spahr, Wolfgang (August 15, 2009). "BMG Is Back: Buying Songs With KKR Cash".Billboard. p. 17.
^Nagl, Hans G. (July 9, 2009). "KKR greift Bertelsmann im Musikrechtegeschäft unter die Arme".Handelsblatt (in German). p. 12.
^Rungg, Andrea (January 22, 2010). "BMG sucht in großem Stil Musikrechte".Financial Times Deutschland (in German). p. 8.
^"Bertelsmann-Musiktochter auf großer Einkaufstour".Rheinische Post (in German). July 26, 2010.
^abSiebenhaar, Hans-Peter (May 4, 2010). "Bei Bertelsmann spielt wieder die Musik".Handelsblatt (in German). p. 26.
^Knappmann, Lutz (March 29, 2010). "Bertelsmann übernimmt Rechte an Elvis-Songs".Financial Times Deutschland (in German). p. 7.
^"Bertelsmann stockt Führungskreis auf".Börsen-Zeitung (in German). June 4, 2013. p. 16.
^"Annual Report 2018"(PDF). Bertelsmann. March 26, 2019. pp. 21, 130.Archived(PDF) from the original on March 28, 2019. RetrievedApril 1, 2019.
^"Bertelsmann startet neu im Musikrechte-Geschäft".Die Welt (in German). October 15, 2008. p. 15.
^"Bertelsmann will mehr Musikrechte".Neue Westfälische (in German). June 25, 2009.
^Blauth, Sabrina (2016).Digitalisierung in der Musikindustrie: Wirtschaftliche Probleme und die Suche nach alternativen Einnahmequellen (in German). Hamburg: Diplomica Verlag. p. 25.ISBN978-3-95934-339-8.
^abjoint venture with Amperwelle Studio München Programmanbietergesellschaft,Axel Springer AG, Burda, Studio Gong, m.b.t. Mediengesellschaft der bayerischen Tageszeitungen für Kabelkommunikation, Medienpool and Radio Bavaria Rundfunkprogrammgesellschaft.
^joint venture with Verlagsgesellschaft Madsack, Studio Gong Niedersachsen and Brune-Rieck-Beteiligungs.
^joint venture with Axel Springer, Heinrich Bauer Verlag, Lühmanndruck Harburger Zeitungsgesellschaft and Morgenpost Verlag.
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