BMG‘s new CEO Thomas Coesfeld is implementing substantial changes within the company. Coesfeld recently announced that BMG will take control of its streaming business, marking the end of a long-standing partnership with Warner Music’s ADA. While BMG parts ways with Warner Music, it has embarked on a significant new collaboration with Universal Music Group (UMG).
BMG and UMG have officially formed an alliance designed to explore a range of collaborative initiatives aimed at expanding opportunities for BMG-signed artists on a global scale. BMG, as the fourth largest music company globally, is already a major player in the music industry, with a strong presence in the UK, where it ranks as No. 4 in terms of recorded music market share, outpacing even Beggars Group.
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The inaugural project under this alliance involves transferring the distribution of physical formats of BMG’s music, including vinyl and CDs for thousands of BMG-signed artists, to UMG’s Commercial Services division. This division boasts operations in over 60 countries, covering more than 200 markets. The transition of physical product distribution to UMG is scheduled to commence in the second quarter of 2024, with completion expected by the end of the same year. Distribution in Europe currently runs through ADA/Arvato.
BMG singed a global partnership deal with British Dancehall artist Stefflon Don last year ahead of her yet to be released debut album “Island 54”, and the company also owns the catalog for the original Trojan Records, which has a roster of Jamaican artists who ruled U.K. music in the 1960s.
The two companies have a history that goes back to 1975 when Trojan Records U.K. went into liquidation without paying royalties to its artists. Trojan Recordings was then purchased 10 years later by Colin Newman, an accountant and businessman who held the company until 2001. He then sold the Trojan catalogue to the London label Sanctuary Records for £10.25m. Six years later, Sanctuary was purchased by Universal Music Group, who then sold Sanctuary’s catalogue, including Trojan’s reggae and ska songs, to the Berlin-based record label BMG in 2013.
Over 10,000 songs are including in the Trojan catalogue which was previously a division of Chris Blackwell’s Island Records, and those songs including cuts from Jimmy Cliff, Bob Marley and The Wailers, and Desmond Decker made profits of between £1.1m on £3.1m for the year to December 2000 according to The Guardian.
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Now UMG is set to provide BMG-signed artists with even more extensive opportunities worldwide. This alliance is a significant step forward in expanding the reach and influence of BMG in the music industry.
Thomas Coesfeld, CEO of BMG, expressed his enthusiasm for the collaboration, emphasizing the potential benefits it holds for BMG-signed artists. He praised UMG’s scale and technology, acknowledging that it promises to offer significant advantages to the artists under BMG’s banner saying,“Our alliance with UMG is a significant step to further enhance our service to BMG-signed artists. We are delighted to partner with UMG, the world leader in music-based entertainment on our thriving physical recorded music business. Their scale, technology and commitment promises to further expand opportunities for BMG-signed artists around the world.”
Sir Lucian Grainge, Chairman and CEO of Universal Music Group, lauded BMG’s innovative approach to the music business and expressed his anticipation of collaborating on various initiatives to enhance opportunities for artists and both companies. He said, “BMG has brought a fresh vision to the music business, and we look forward to partnering with BMG on a variety of initiatives to provide greater opportunities to artists and our respective companies.”
This alliance builds upon UMG’s history of forming “unconventional” partnerships within the music industry, as seen with its alliance with indie giant PIAS in 2021, where UMG took a 49% stake in PIAS.
BMG’s recorded music catalog boasts approximately half a million tracks and features the works of a diverse array of artists, including Bob Marley, Drake, Shenseea, Buju Banton, Sean Paul, Kanye West. The company’s recorded music business has seen a remarkable threefold increase in revenue over the past seven years, with ongoing successful artist campaigns and upcoming releases from artists like Jason Aldean, Jennifer Lopez, and Mötley Crüe.
