BMG Takes Direct Control of its Digital Business in Major Strategy Move

BMG, the fourth largest global music company, is making significant changes to its recorded music strategy taking direct control of its 80 billion-stream digital business. This move marks a new chapter for BMG and a milestone for the music industry as the company becomes the first new global music company in the past two decades to control its key routes to market.

The new strategy will be phased in later this year and will start with BMG’s relationships with streaming services Spotify and Apple Music. BMG will continue to outsource physical distribution of its recorded music catalog, which includes works from artists such as Jason Aldean, Jelly Roll, Mötley Crüe, and Kylie Minogue. The company is expected to announce a new distribution partner soon.

BMG’s CEO, Thomas Coesfeld, sees this move as the music company reaching a new evolutionary stage. By taking direct control of its relationships with streaming services, BMG aims to better market, service, and advise its artists and improve its relationship with key digital and physical partners.

One of the advantages of third-party distribution for BMG was its early access to streaming data. However, going direct, the German-owned company will have greater insight into its streaming data, allowing for more informed decision-making.

The winding down of BMG’s distribution agreement with Warner Music Group’s ADA was described as amicable. Warner Music Group CEO, Robert Kyncl, expressed pride in helping BMG grow to a scale where they could achieve their ultimate objective of going direct. This change will create more space for ADA to focus on developing new partnerships, and for Warner Music Group to continue investing in artists, songwriters, and labels.

Overall, BMG’s decision to take direct control of its digital business is a major strategic move that will reshape the company’s music distribution strategy and enhance its relationships with streaming services.

Definitions:
– BMG: A global music company.
– ADA: Warner Music Group’s Alternative Distribution Alliance.
– Streaming services: Online platforms that allow users to listen to music or watch videos on demand.
– Physical distribution: The process of delivering physical copies of music, such as CDs or vinyl records, to retailers for sale.

Sources:
– Source article: [source]
– ADA: Warner Music Group’s Alternative Distribution Alliance.
– Spotify: A popular music streaming platform.
– Apple Music: A music streaming service developed Apple Inc.
– Jason Aldean: An American country music singer.
– Jelly Roll: An American rapper and songwriter.
– Mötley Crüe: An American rock band.
– Kylie Minogue: An Australian singer, songwriter, and actress.
– Warner Music Group: A global music company.