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BMG Revenue Jumps 10% in ‘Turnaround’ Year for Publishing and Physical Music

The company said publishing is "roaring back" after being hit hard by the COVID-19 pandemic the year before.

BMG produced an operating EBITDA — that’s earnings before interest, taxes, depreciation and amortization — of 144 million euros ($170.31 million) on revenues of 663 million euros ($784.13 million) for the year ended Dec. 31, the company announced on Thursday. That represented a 5.1% improvement over the 137 million euros ($156.5 million) operating EBITDA margin from the prior year; and a 10.1% increase from 602 million euros ($687.6 million) for 2020.


“2021 marked a complete turnaround from the pandemic with double digit revenue growth overall and BMG’s growth in physical nearly three times that of the market as a whole,” BMG CEO Hartwig Masuch said in a statement. “Publishing is roaring back with YTD publishing revenues growing at more than twice the rate of a year ago. 2022 already looks extremely positive.”

The company said digital growth and physical sales drove overall increases in revenue. In particular, BMG digital revenue grew 15.6% to 417.7 million euros ($494 million) from 361.2 million euros ($412.56 million) to now comprise 63% of revenue versus 60% in 2020. On the other hand, BMG’s operating EBITDA margin declined to 21.7% of revenue, versus the prior year when it was 23%.

BMG’s revenue breaks out to 62% publishing, or 411.06 million euros ($486.2 million); and 38% recorded music, or 251.94 million euros ($297.97 million). That represents a 2 percentage point swing in favor of recorded music compared to 2020, when publishing totaled 64% of revenue or 385.3 million euros ($440.1 million), while recorded music garnered 36% of revenue, or 216.7 million euros($247.4 million).

Masuch indicated that since BMG is much more heavily weighted in publishing than the 3 major music companies, BMG was inordinately impacted by COVID-19’s effect on performance royalties (i.e. all the shut-down businesses that normally play music and pay royalties).

“With publishing accounting for 62% of our sales, and the COVID effect on performance as dramatic as it was, we were never going to see the same growth as pureplay recordings companies,” Masuch said.

In contrast to BMG’s 10.1% in growth, the revenue of the three major music companies, which are dominated by their recorded music operations, are currently experiencing revenue growth ranging from 14% to 22% over similar timeframes, depending on which period you look at for which company.

During the year, the company’s publishing operation enjoyed strong performances from Mick Jagger, Keith Richards and Roger Waters, as well as DJ Khaled, Iron Maiden and Diane Warren, among others. It also reported that the Scorpions, John Legend and Juice WRLD’s estate renewed their respective publishing catalogs.

In looking at the BMG’s recorded music operation, it said strong performance from streaming and physical music sales drove revenue growth. While it didn’t specify physical revenue, it did say the company had distributed 3 million vinyl albums during the year. As for digital, which includes streaming and downloads, the recorded music division said it accounted for 74% of revenue, or 186.44 million euros ($220.5 million).

In the label business, BMG released new works from Billy Idol, Carlos Santana, Duran Duran, Garbage, Iron Maiden, Jason Aldean, Pat Metheny and Van Morrison, among others; while catalog releases included titles from Mick Fleetwood & Friends, Motörhead, Nick Cave & The Bad Seeds and Buena Vista Social Club. BMG also signed new recording contracts with artists including 5 Seconds of Summer, Bryan Adams, Carlos Santana, JLS, Maxwell, Duran Duran and No Angels.

The company also partnered again with KKR, which had been an investor for a few years beginning back in 2008. As part of that partnership, BMG and KKR acquired music rights from John Legend and ZZ Top. Separately, BMG said it acquired an extensive portfolio of Tina Turner rights. And in what it describes as its biggest deal since the company’s rebirth in 2008, BMG acquired the entire Mötley Crüe master recording catalog. Terms of the acquisitions were not disclosed.

Beyond those acquisitions, BMG said it expanded into live music by acquiring KARO, the concert agency that organizes Germany’s renowned Taubertal Festival.

BMG broke down overall 2021 annual revenue by territory:

  • U.S. generated 349 million euros ($412.8 milion) in revenue, up 16.7% from the prior year’s total of 299 million euros ($341.5 million)
  • The U.K. rank up 78 million euros ($92.3 million) or a 4.9% drop from the prior year when revenue totaled 82 million euros ($93.7 million)
  • France brought in 63 million euros ($74.5 million), or a whopping 26% increase from the prior yea’s total of 50 million euros ($57.1 million)
  • Germany tallied 40 million euros ($47.3 million), a 13% drop from the prior year’s 46 million euros ($52.5 million)
  • Other European countries garnered 79 million euros ($93.4 million), or a 11.3% increase from 2020’s total of 71 million euros ($81.1 million)
  • All other countries gathered 52 million euros ($61.5 million), the same as the prior year

As a percentage of revenue that breaks out to:

  • U.S. 52.8% in 2021 versus 49.7% in 2020
  • U.K. 11.8% versus 13.6% in the prior year
  • France 9.5% versus 8.3%
  • Germany 6% versus 7.6%
  • Other European countries 12% versus 11.8%
  • The rest of the globe 7.9% veruss 9.6%

Going forward, the company said its “focus is on growth through signing new contracts with artists and authors, especially the acquisition of music rights and the monetization thereof. Furthermore, the growing international market penetration of subscription- based streaming services offers opportunities to expand the recorded-music and music-publishing markets as well as a significantly expanded monetization basis, e.g., in the areas of gaming, fitness and self-help apps.”

BMG employees numbered 1,025, or a 10 position increase over 2020’s total of 1,015. The company operates 19 offices in 12 core music markets and now represents over 3 million titles and recordings.

Overall, BMG’s parent, Bertelsmann reported an 8.1% increase in revenue to 18.7 billion euros ($22.1 billion) for 2021, versus the prior year when it produced 17.29 billion euros ($19.75 billion); while group profit increased 58.3% to 2.31 billion euros ($2.73 billion) from 2020’s 1.26 billion euros ($1.67 billion).

As indicated in the Bertelsmann results, this story uses an exchange rate of 1.1827 euros to the U.S. dollar for 2021; and 1.1422 euros to the dollar for 2020.