Business News Labels & Publishers

BMG bigs up rights and royalty management capabilities in stats brag memo

By | Published on Friday 31 March 2023


BMG boss Hartwig Masuch bigged up his company’s rights and royalty management capabilities in a memo to staff yesterday, which accompanied the publication of various financial stats in the annual report of its parent company Bertelsmann.

While the recordings side of BMG has continued to grow in recent years and, according to yesterday’s memo, “reached a new high with a 40% share of total revenues”, BMG is still bigger on the songs side of the music rights business.

On the songs side, there are more complexities to navigate and more administration to complete to ensure songwriters get paid whenever their music is played. Collective licensing is a much bigger deal when it comes to songs, meaning that effectively interacting with the big network of collecting societies around the world is key.

And with digital, music publishers and collecting societies need to identify what recordings contain their songs and then claim the royalties they are due, which is complicated by the fact song copyrights are usually co-owned, and the music publishing sector has traditionally dealt with the mechanical rights and performing rights separately. All of which can cause delays and deductions in songwriter payments, or stop the songwriter from getting paid entirely.

There are data challenges on the recordings side too of course. And for both songs and recordings, deals with user-generated content platforms create extra issues around identifying what music users are including in their videos.

With that in mind, Masuch’s memo honed in on BMG’s investments “in our capabilities, our systems, our processes and our people”. As a result of those investments, he added, “the past year has seen significant developments, migrating our systems to the cloud for speed, resilience, and flexibility, introducing new AI tools for income tracking and sync and, of course, further adding to our teams all over the world”.

“We continue our relentless drive to eliminate the frictions and inefficiencies which have plagued the music industry for decades”, he went on. “In the past year we have again halved the time to register a song with societies and digital services worldwide. And we have increased the acceptance rate of automated registrations to a new high of 99.7%”.

“We want our clients to receive their income generated anywhere in the world as quickly as possible”, he went on. “The US and the UK have doubled the accounting cycle for all publishing clients to quarterly. At the same time, 99% of global revenues are now accounted to our artists and writers within the same accounting period we receive them, no matter the country these royalties were generated in. This all was achieved while royalty data volumes processed tripled compared to last year. And we’re far from finished”.

“From our industry leading YouTube optimisation team to our new royalty system which runs seven times faster than its predecessor”, he continued, “we remain focused on being the most reliable and effective partner for artists, songwriters and rightsholders globally”.

In terms of the financial stats, Masuch bragged: “BMG’s revenues increased by 31% last year to €866m. That’s over €200m more than in 2021 and three times more than the previous year’s revenue increase of €61m. Importantly, our growth did not come at the expense of profitability, and we actually increased our margin to 22.5%”.

The memo was technically from Masuch and Thomas Coesfeld, the latter being the company’s current CFO who is set to takeover as CEO next year.