BMG reported its H1 2025 outcomes earlier right now (August 28), with numbers that instructed a well-recognized story for the trendy music enterprise: complexity beneath the floor.
The Bertelsmann-owned firm’s natural income dipped 4.4% YoY to EUR €424 million within the interval, however BMG mentioned its underlying streaming income climbed by excessive single digits.
In the meantime, BMG’s EBITDA margin jumped considerably to 28.7% – impacted by what Bertelsmann referred to as a “strategic scaling again of lower-margin actions”.
For Thomas Coesfeld, BMG’s CEO since 2023, these outcomes symbolize progress towards a extra targeted, environment friendly operation.
Below his management, BMG has doubled down on its core publishing and recorded music companies whereas shedding lower-margin segments, together with its involvement in reside live shows.
In the meantime, the corporate has launched into its ‘BMG Subsequent’ technique, bringing digital distribution in-house and leveraging AI-powered instruments.
The H1 numbers additionally replicate BMG’s continued M&A urge for food: it pulled off 17 acquisitions in H1 2025, pushing its complete music rights investments since 2021 to EUR €1.2 billion.
Notable latest successes at BMG embody nation superstars Jelly Roll and Lainey Wilson breaking by way of internationally; the agency’s ~$100 million 2017 acquisition of Damaged Bow Information/BBR Music Group appears to be like more and more prescient.
Maybe most tellingly for the broader trade, BMG’s outcomes come as basic questions on music’s worth proposition intensify. Spotify‘s latest value will increase have sparked contemporary debate about streaming economics, whereas AI corporations face mounting authorized challenges over their use of copyrighted materials.
Right here, MBW quizzes Coesfeld on BMG’s strategic course, the value factors of streaming companies, and why he believes the broader music trade should work to make sure creators are “paid pretty and credited correctly…”
What’s the most fascinating progress driver for BMG proper now, and how will you broaden on it?
One of the vital fascinating progress drivers for BMG proper now’s our BMG Subsequent technique, significantly the transfer to convey digital distribution in-house.
By increasing our direct licensing agreements, we achieve improved entry to listening information and viewers insights, enhanced on-platform advertising and marketing alternatives, and larger transparency and management over how our artists’ and songwriters’ works are monetized. These capabilities extra successfully promote our repertoire straight on the level of consumption, making certain optimum visibility and attain.
As well as, the combination of AI-powered instruments is already creating new efficiencies and unlocking alternatives for our artists on the Recorded Music aspect in addition to our songwriters in Publishing — our core enterprise and progress driver.
How do you foresee the stability between publishing revenue and recorded music revenue altering on the firm within the years forward?
Music publishing will probably stay the first revenue driver for our enterprise, and we plan to allocate extra assets to our profitable and diversified publishing operations.
“We plan to allocate extra assets to our profitable and diversified publishing operations.”
Signings, administration and buyouts stay robust engines of progress, particularly as streaming expands globally.
Our energy lies in our targeted mannequin — publishing and recordings — which provides us resilience and adaptability because the market evolves.
We hear rather a lot about ‘expanded rights’ in music today (merch, gaming, reside and many others.), usually centered on ‘title, picture, and likeness’ rights. How is BMG managing alternatives on this space of the enterprise whereas sticking to your give attention to ‘core’ music rights?
Our technique stays firmly targeted on our core companies of music publishing and recorded music. We’ve deliberately scaled again from lower-margin segments, however we stay open to selective alternatives in expanded rights the place they make strategic sense.
“we received’t chase distractions that don’t complement our core focus areas.”
When expanded rights create actual worth for artists and deepen fan engagement — like gaming tie-ins or model partnerships — we’ll discover them. What we received’t do is chase distractions that don’t complement our core focus areas.
Your continued funding in US frontline music beneath Jon Loba continues to bear fruit. Have you ever observed a progress in energy of US repertoire all over the world up to now 12 months, particularly as native hip-hop’s dominance lessens and different genres — nation, for one — grows globally?
We’ve seen unbelievable success with each Lainey and Jelly throughout key worldwide markets, highlighting a broader pattern: the worldwide urge for food for nation music and different genres as soon as thought of US-centric is increasing quickly. For instance, Jelly Roll’s Superbly Damaged and Lainey Wilson’s Whirlwind showcase how our artist-first, worldwide method is delivering outcomes effectively past the US.
“the worldwide urge for food for nation music and different genres as soon as thought of US-centric is increasing quickly.”
Jelly Roll is breaking by way of as a world phenomenon, with chart-topping debuts within the UK, Canada, and Australia, alongside together with his first worldwide excursions throughout Europe, Canada, Australia, and New Zealand.
In the meantime, Lainey Wilson continues to cement her standing as nation music’s main international feminine celebrity, with Whirlwind topping the charts within the UK, breaking into the Prime 20 in Canada and Australia, delivering a number of worldwide No. 1 singles, and headlining sold-out reveals throughout Europe, with Australia and New Zealand on the horizon.
Talking of which… wanting again, that 2017 Damaged Bow/BBR acquisition appears to be like like a discount?!
We’re extremely grateful to have Jon [Loba] and the BBR crew as a part of BMG.
BBR has been each a cultural and artistic win, proving the energy of our method in combining entrepreneurial labels with the dimensions of BMG.
Your M&A technique: What are the primary standards for catalogs or corporations that BMG is seeking to purchase within the 2025 market? Are you discovering that belongings are noticeably cheaper than they have been 2-3 years in the past?
Fueled by Bertelsmann’s Enhance program, our funding technique continues to be a vibrant spot, with 17 acquisitions within the first half of 2025, bringing complete investments in music rights catalogs since 2021 to EUR €1.2 billion and persistently delivering robust returns.
When evaluating catalogs or corporations, our principal standards embody the standard and lasting relevance of the repertoire, the energy and monitor document of the artists and songwriters, and the potential to create incremental worth.
We proceed to take a disciplined, value-driven method to acquisitions.
You’ve lengthy been each constructive and cautionary on how AI will use music. With Suno and Udio now being sued — and Anthropic dealing with a lawsuit over lyrics — the place do you suppose the ecosystem finally ends up, and can or not it’s materially additive to music’s backside line?
Innovation has at all times been a part of BMG’s DNA, and we see actual potential for GenAI to speed up what we will obtain. That mentioned, copyright safety and truthful remuneration for artists and songwriters are non-negotiable.
With partnerships akin to Google Cloud and OpenAI, we’re already utilizing AI to make our operations more practical, whereas advocating for a framework that ensures AI evolves in a manner that’s each accountable and additive to the music ecosystem.
These initiatives will assist set up much-needed readability for rights holders, and we welcome regulation that ensures innovation doesn’t come on the expense of the creators’ rights.
Streaming Value rises: We’ve seen a transfer by Spotify lately, however if you have a look at the world of audiovisual, is the value of music’s companies transferring quick sufficient, usually sufficient?
Spotify’s latest value will increase have reignited an essential dialog in regards to the worth of music and the individuals who create it.
Each stream displays the time, expertise, and dedication of artists and songwriters, they usually deserve truthful compensation to construct sustainable careers.
“In comparison with audiovisual, music has traditionally been slower to regulate pricing and stays undervalued relative to the worth it delivers.”
In comparison with audiovisual, music has traditionally been slower to regulate pricing and stays undervalued relative to the worth it delivers. Encouragingly, subscriber numbers have stayed robust whilst costs have risen, displaying simply how deeply individuals worth music.
As an trade, we should proceed to evolve pricing fashions to correctly reward creativity and guarantee they’re truthful for all stakeholders.
Exterior of value rises and AI, is there any difficulty particularly you would like the trade might ‘put proper’ as issues stand right now?
One of many trade’s greatest challenges is ensuring creators are paid pretty and credited correctly.
Too usually, income flows lack transparency, and inaccurate metadata means royalties don’t at all times attain the individuals who earned them.
“we have to go additional as an trade to construct a system that’s truthful, correct, and sustainable for all artists and songwriters.”
Each artist, songwriter, and producer deserves to know the way their work is monetized and to see their contributions acknowledged.
At BMG we’ve invested in higher information practices. However we have to go additional as an trade to construct a system that’s truthful, correct, and sustainable for all artists and songwriters.
Some monetary media, each in Germany and globally (together with THE FINANCIAL TIMES), appear very considering whether or not you’ll be topped the brand new CEO of Bertelsmann sooner or later. How are you going to block out this noise to solely give attention to outcomes for BMG?
I stay absolutely targeted on BMG and our unbelievable crew devoted to serving our artists and songwriters.
“There’s by no means a query the place my priorities lie.”
There’s by no means a query the place my priorities lie, which is delivering the very best outcomes for our enterprise, constructing lasting worth for our repertoire, and making certain BMG continues to develop as an innovation chief in music.
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