Bertelsmann CEO Thomas Rabe on BMG's China Expansion: 'In Short You Can Make Money'

BMG, the world's fourth largest music rights group, is pushing into the Chinese market, with plans to set up operations this year and eyeing possible acquisitions in the region.

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“There is a new awareness with regards to copyright issues in China and there are new and emerging formats (for generating revenue),” said Thomas Rabe, CEO of BMG parent company Bertelsmann at the group's annual press conference in Berlin Wednesday.

“In short you can make money in China with music.”

Rabe was short on details about BMG's Chinese strategy but said the company has “set up a team and are ready to get started” and hinted it would be looking to make acquisition in the music space in China to build its business there.

Bertelsmann took full control of BMG last year, by buying out the shares in the group controlled by private equity group Kohlberg Kravis Roberts, Bertelsmann has been aggressively adding to the company's catalog, signing publishing deals from several high-profile artists, including the Rolling Stones' Mick Jagger and Keith Richards, Robbie Williams and The Pet Shop Boys.

Earlier this year, BMG acquired Talpa Music, the electronic dance music group founded by Dutch music publisher Tony Berk and media entrepreneur John de Mol, creator of The Voice, taking over rights to its catalogue of more than 37,000 songs, including ones from EDM stars Afrojack, Tiesto, Fedde Le Grand, Laidback Luke and Bakermat. Overall, Talpa handles the publishing rights to over 500,000 songs.

BMG trades under the name BMG Chrysalis in the U.S., UK and Sweden. Earlier this year, the division signed publishing deals with The Strokes as well as German acts Casper and Kraftklub.

"In just five years, BMG has become the number four company in music rights and is one of the most active protagonists in the business," said Rabe, pointing to BMG CEO Hartwig Masuch for turning “a small creative nucleus into a powerhouse that provides the right answers to the challenges of the music industry in this digital age.
Bertelsmann got out of the traditional music recording business in 2008 when it sold its half of Sony BMG Music Entertainment to Sony Music for $1.2 billion. It then launched the new BMG, focusing on music rights management.

“Digitization opens up many exciting opportunities for artists to market themselves but also creates a myriad of revenue streams that have to be monitored and actively managed,” said Masuch, explaining the approach of the new BMG. “For creative professionals, this is more complex, fragmented and confusing than it was 15 years ago. We don’t offer artists an all-you-can-eat set menu, but customized services.”

BMG administers the rights to more than one million songs and holds some 250,000 master rights with a catalog that ranges from Bruno Mars and Gossip to Johnny Cash and Will.i.am.

BMG has snatched up numerous independent publishers including Crosstown Songs, Cherry Lane Music Publishing, Stage Three Music, Evergreen Copyrights and Chrysalis Music Group as well as – from Sony/ATV Music Publishing - the song libraries of Virgin Music and Famous Music UK.

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