In January, BMG CEO Thomas Coesfeld told MBW how the company is preparing for the “tectonic shifts” affecting the music rights business.
Part of those preparations have included changes to its digital and physical music distribution arrangements; focusing purely on music publishing and recordings; and reducing overheads.
The executive has also committed to “doubling down” on BMG’s investment in the United States, reiterated just this week with the restructure of its frontline recorded music team led by Jon Loba, and a deal with Republic Records for the new Jelly Roll album.
Berlin-based Coesfeld was in the US himself this week to outline BMG’s market positioning on stage in front of the great and good of the M&A world.
Coesfeld participated in a keynote fireside chat at The Second Annual Music Investor Conference Hosted by NMPA boss David Israelite in New York on Tuesday (June 11), in which he highlighted BMG’s Investment Strategy.
During the conversation with Israelite, Coesfeld explained that “an appreciation for the art of storytelling and advocating for creators’ rights has always been embedded into the DNA of both BMG and our parent company Bertelsmann”.
Coesfeld also told the Investor Conference audience that, while BMG has “the financial power of a major,” the company’s “unique superpower and strength lies in our agility due to our size and the entrepreneurial spirit of our team”.
MBW has agreed, in accordance with the rules of the day, to not report on any of the conversations at the Annual Music Investor Conference. But BMG’s CEO Thomas Coesfeld has given us personal permission to run the quotes featured in this article.
The BMG CEO’s appearance in New York this week follows what he said at the event was the company’s “best quarter ever in Q1 2024”. He noted that BMG “plans to continue to build on this momentum.”
BMG’s annual revenues hit EUR €905 million (USD $979m) in FY 2023, up 4.6% YoY.
BMG’s operating EBITDA in 2023 stood at EUR €194 million ($210m), which was flat vs. the prior year’s EBITDA result of €195 million.
Elsewhere during the keynote on Tuesday, Coesfeld sketched out the company’s new “BMG Next strategy” and explained that BMG has “primely positioned ourselves to be a future-forward music company, uniquely poised to meet the evolving needs of artists and songwriters”.
Part of BMG’s Next strategy was implemented this week with a new US Frontline Recorded organizational structure, which the company says “is designed to provide BMG artist partners with more tailored expertise and service”.
The restructure sees Jon Loba, President, Frontline Recordings, BMG North America, assume the role of President, Frontline Recordings, The Americas.
“BMG is committed to investing more in the US market and open to partnering with the right investors,” Coesfeld told the audience in New York.
“We’re the ideal partners. We have the capital to purchase IP and the team and technology to maximize the value of those rights.”
Thomas Coesfeld, BMG
Digging deeper into BMG’s investment strategy during the fireside chat with David Israelite, Coesfeld said: “We’re the ideal partners. We have the capital to purchase IP and the team and technology to maximize the value of those rights.”
He added: “We strive to be the trusted home for songwriters and artists’ lifetime repertoire. We are not in it for short-term maximization, but for sustainable roster build-out and growth.”
The conversation also turned to the current state of the music rights market and the role he believes BMG can play in it.
“Due to changing interest rates, many entered the market believing music rights were a great asset but did not know how to actively manage these incredible songs,” said Coesfeld.
He added: “At BMG, we can partner on an investment and help to actively manage these rights.”
In November, just four months after taking on the CEO role at BMG, the company unveiled its “plan for growth” and noted that it would start making “substantial investments” in technology and its myBMG platform for songwriters and artists.
“We significantly increased our investment into technology to enhance our operating capabilities for the future,” Coesfeld explained in New York on Tuesday.
In March, citing an interview with Thomas Rabe, CEO of BMG parent Bertelsmann, The Financial Times reported that Bertelsmann was considering growing its music division through a merger with a rival or a “breakout investment”.
“BMG could potentially be an opportunity for a breakout investment and joining forces with a competitor,” Rabe said.
“If the opportunity arose to significantly grow BMG by joining forces with another music company, we would consider it.”Music Business Worldwide