MTV Video Music Awards
How BMG Is Helping Nickelback and Others Return to The Charts
Zach Katz and BMG U.S.'s growing recorded music roster is surging with a mix of veteran and developing talent.
They've had petitions circulated to prevent them from performing in places as wide-ranging as the countries of Australia and the United Kingdom to an NFL halftime show in Detroit. Figures no less prominent than former President Barack Obama and Facebook founder Mark Zuckerberg have jokingly dissed them. And they are often mentioned in the same breath as other negatively-associated bands such as Limp Bizkit, Creed and Candlebox. And yet, Nickelback, unlike most others, have continued to enjoy astronomical sales and may just be one the most inexplicable conundrums in all of the music business.
The Canadian quartet are Billboard’s top performing duo/group of the 2000s decade and, according to Nielsen Music, have sold 24.1 million albums and earned 1.1 billion streams of its songs in the United States to date. But despite a diamond certification for their album All the Right Reasons, and the single "How You Remind Me" topping Billboard's decade-end Rock Songs chart, Nickelback remains an almost reflexive punchline for reasons which most cannot explain.
With that kind of baggage, who in their right mind would sign Nickelback?
“Of course we knew what they’re reputation was,” says Zach Katz, president of repertoire and marketing at BMG U.S., which in January signed Nickelback to a global record deal, "But we were absolutely amazed by how legit, how focused, how forward-thinking and how internationally liked this band is.” Last week, BMG released Nickelback's ninth studio album, Feed the Machine, which is heading for a top ten spot on this weekend’s Billboard 200 with roughly 45,000 albums sold which, depending on this week's competition, could be enough for the record to break into the top five.
“The album, in my opinion, is actually very good,” Katz says. “If you see the reviews even on iTunes it got 4.5 stars, and this is an artist that’s supposedly hated. iTunes would have been the perfect place for people to sh-t on it, so to speak. They put together a very, very good body of music here. We’re happy with this start and we think it’s great.”
BMG, the music arm of Germany’s Bertelsmann Corporation, initially focused on publishing and neighboring rights since its return to music sphere in 2008 shortly after its split with Sony (when it kept some 200 recorded masters). Katz says the company spent about a “billion-and-a-half euros” (about $1.68 billion in today’s currency) in its first three years on a number of major publishing catalogs, which now includes Cherry Lane Music, Bug Music, Chrysalis Music, Trojan and Famous Music UK, among others. BMG now has the world’s fourth-largest publishing catalog.
But in more recent years, BMG has turned its attention to recorded music and is slowly but steadily acquiring and building its recorded roster and market share, much as it has in publishing. In Bertelsmann's 2016 earnings report, revenues for BMG rose 12.2 percent to 416 million euros ($451 million) for which both publishing and recorded music were cited as drivers and of course streaming's rise.
“When I first got to BMG three years ago, it was really just them purchasing Vagrant and us coming in and working with the BMG team that was there,” says Jon Cohen of Vagrant Records (PJ Harvey, Black Rebel Motorcycle Club, The Hold Steady) and current executive vp recorded music for BMG U.S. “Where we might have started in my first year with maybe 35 to 40 releases, you’re now looking at 80 to 90 releases a year.”
Cohen says a big part of BMG’s surge, much like its publishing expansion, is due to acquisitions. Since obtaining Vagrant, the growing label group nabbed Steve Greenberg’s S-Curve Records (Andy Grammer, AJR and Elise Legrow, as well as previous records by Joss Stone, Tom Jones and Duran Duran) and purchased Craig Ericson’s Oregon-based hard rock label Rise Records (At The Drive-In, PVRIS, The Devil Wears Prada, Of Mice & Men) in 2015. Earlier this year, BMG made a massive country music play with its acquisition of Broken Bow Records Music Group headed by John Loba, whose roster includes Jason Aldean and Dustin Lynch (Broken Bow), Randy Houser (Stony Creek), Joe Nichols (Red Bow) and Trace Adkins (Wheelhouse), among others, for what was reported to be over a $100 million.
“From an A&R diversity perspective to a marketing capacity, we’re very well covered at this particular point,” Katz says about BMG’s label holdings. Yet the particular niche the label has found is different from most in that some of their best-selling artists are veterans not necessarily looking to break through on the back of pop hits.
“There is and overall belief at BMG," Cohen says, “that there is a segment of the music population -- mainly of all the artists that influenced so many other artists -- that is being underserved and overlooked, so to speak. And we’re having great success with those acts, which I think is a combination of our attention to them and the staff we have. And where we’re seeing amazing returns is from bands that were on majors in their prime that are doing as well, if not better, now.”
Both BMG execs point to Blink-182 and Janet Jackson as a examples of artists whose latest releases topped the Billboard 200. Blink, down to two original members and counted out by many when they released California last summer, debuted at No. 1 with 186,000 equivalent album units and received their first Grammy nomination. Jackson’s Unbreakable also debuted at No. 1 the year prior, with 116,000 equivalent album units earned in its first week.
"We don’t see those artists as has-been's,” Katz says. “We don’t see them as people who have put their names in the history books of music but no longer deserve an opportunity to speak to their audience. We pride ourselves on working with them.”
At the same time, the BMG label group is working with a slew of developing artists, including Andy Grammer, whose new single "Give Love" came out this month; PVRIS, whose sophomore record is coming out via Rise/BMG; LP, whose third record sold nearly 300,000 copies worldwide; and MadeInTYO, who arrived through an alliance with Commission Records and has already had one platinum single "Uber Everywhere."
While BMG Music generally doesn’t take any part of an artist's touring revenue or publishing royalties and licenses masters from artists, the company has other ways to monetize. A strong international presence in Europe stems from its German headquarters, but the company is also aggressively moving into Asia; in November, BMG expanded its partnership with China’s e-commerce giant Alibaba. It's also expanded beyond music; BMG now has a book publishing wing (the company just put out a deluxe book with the Zombies) as well as A/V capabilities which include the PBS series Soundstage and several documentaries in development.
Katz says that currently publishing is roughly 75 percent of BMG’s business, while recorded music accounts for roughly 25 percent -- but those figures are in the process of changing. “I think our goal over the next three-plus years is to get it to 50/50,” he says. “I think it’s going to go up between five and 10 percent every year for the next three to five years.”
All of which brings us back to Nickelback and its roll-out strategy. "When Zach and I first heard the music, we were quite happy," says Cohen. "'Feed the Machine,' which was the first active rock single, triggered an idea in terms of what they were talking about. It was right when West World was at its peak on HBO— that kind of apocalyptic futurist nihilistic world. And we had a discussion with the band where we said let’s make some incredible visuals for this very visual music and let the music speak for itsef."
Nickleback, both BMG execs noted, is in a unique position because at their height they were both a pop band and an active rock band with singles on multiple radio formats. The label just went to radio with a new single "Song On Fire" while the band has been doing extensive press and shows, including The Today Show and an IHeartRadio live theater broadcast. "We’re plowing ahead with big looks and strong visuals and a strong album," says Cohen, "that’s basically the plan."
This weekend on the Billboard 200 we'll see if the plan pays off as Nickelback faces off against a number of younger, more pop-leaning and popular acts on the charts. This includes new albums by likely No. 1 Lorde (who is expected to top the charts) and 2 Chainz, as well as non-debut contenders Katy Perry (in her second week), Kendrick Lamar, Lady Antebellum, Drake, Ed Sheeran, Bruno Mars and SZA.
“We take a long view with Nickelback and all of our bands; it’s not just about first week,” says Cohen. “It’s about where this record’s going to be 12 to 18 months from now and if the ecosystem collectively between the fan base, the band and the label are happy."
As for the future, Katz is bullish on the Nickelback niche model. "I think that we’re going to continue astonishing the world by taking established artists that the world has probably counted out," he says. "We'll show the world that these guys and girls have more chapters to write."