BERLIN (CelebrityAccess) — German recorded music giant BMG announced plans to take direct control of its streaming business following an agreement to end its current distribution deal with Warner Music Group’s ADA.
According to BMG, the decision to take its streaming distribution in-house comes after the company’s revenue from streaming tripled this year and will allow both BMG and ADA to focus on growing their businesses and margins.
While BMG will be taking direct control of streaming distribution, they will continue to outsource physical distribution with a new partner to be announced in the near future, the company said.
BMG’s recorded music catalog encompasses about 500,000 tracks, including works by artists such as AJR, Jason Aldean, Rick Astley, Black Sabbath, Buena Vista Social Club, Cro, 5 Seconds Of Summer, Max Giesinger Andy Grammar, George Harrison, Iron Maiden, The Kinks, Kylie Minogue, Jelly Roll, Dustin Lynch, Mecano, Mötley Crüe, Mötörhead, Nena, Rita Ora, Louis Tomlinson, Lainey Wilson, and many others.
“This is a new chapter for BMG and marks a significant milestone for the music industry more generally as BMG becomes the first new global-scale full-service music company to emerge in the past two decades which controls its key routes to market. Taking direct control of our relationships with streaming services is a major leap forward in our mission to offer artists the most effective and efficient service. The new set-up will enable us to better market, service and advise our great artists and will further improve BMG’s relationship with key digital and physical partners.”
“There are many advantages to third-party distribution in the early years of a new music company, but with BMG’s annual streaming rate in excess of 80 billion streams this year, it is time to unleash the benefits in terms of market insight and leveraging data that going direct will bring. This will enable us to be a better partner to our artist and songwriter clients and to digital services,” added BMG COO Sebastian Hentzschel.
“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 grow our investment behind artists, songwriters and labels. We wish BMG all the best and know that we will have many other opportunities for successful collaboration,” stated WMG CEO Robert Kyncl.
