German recorded music company BMG has announced its plans to bring its streaming distribution in-house and end its distribution deal with Warner Music Group’s ADA. This decision came after BMG saw a significant increase in revenue from streaming, with it tripling this year. The move will allow both BMG and ADA to focus on growing their businesses and improving their margins.
While BMG will directly handle streaming distribution, the company will continue to outsource physical distribution to a new partner, which will be announced soon. BMG’s catalog includes about 500,000 tracks from various artists such as AJR, Jason Aldean, Rick Astley, Black Sabbath, Buena Vista Social Club, and more.
This change marks a significant milestone for the music industry, as BMG becomes the first new global-scale full-service music company to control its key routes to market in the past two decades. By taking direct control of their relationships with streaming services, BMG aims to offer artists a more effective and efficient service. It will also improve BMG’s ties with key digital and physical partners.
Sebastian Hentzschel, COO of BMG, stated, “There are many advantages to third-party distribution in the early years of a new music company, but with BMG’s annual streaming rate surpassing 80 billion streams this year, it is time to unleash the benefits that going direct will bring in terms of market insight and leveraging data.”
In response, Robert Kyncl, CEO of Warner Music Group, expressed his support for BMG’s decision, saying, “We’ve always known that going direct on streaming was BMG’s ultimate objective and we’re proud to have helped them grow to the scale where they could achieve it. Taking this step will mean we create more space for ADA to focus on developing new partnerships, and for WMG to continue to invest in artists, songwriters, and labels.”
Overall, BMG’s move to take direct control of streaming distribution allows them to better serve their artists and songwriters while building stronger relationships with digital partners. This shift signifies the company’s commitment to adapting to the changing landscape of the music industry and leveraging technology to its advantage.
Sources:
– BMG Announces End To Distribution Partnership With ADA, Will Take Control Of Streaming Services (CelebrityAccess)
– BMG ends Warner ADA deal and takes direct control of streaming business (Music Business Worldwide)
