Sep 19, 2023 2 min read

BMG to move from ADA alliance to direct streaming deals

BMG is ending its long-term distribution alliance with Warner Music’s ADA and will enter into direct licensing deals with the streaming services

BMG to move from ADA alliance to direct streaming deals

BMG has announced that it is ending its long-term partnership with Warner Music's ADA division and will start to enter into direct licensing deals with the streaming services later this year.

The current iteration of BMG launched in 2008 and - after several years of growing its recordings catalogue, both through acquisitions and new artist deals - it formed a distribution alliance with ADA in 2016. Prior to that, it had worked with various distributors, many of which had already been distributing the catalogues it had acquired.

Since 2016, ADA has delivered BMG's recordings to the streaming services under its licences. Given the size of BMG's recordings catalogue, which continued to grow, it became a very significant client for the Warner label services business. But no more.

BMG CEO Thomas Coesfeld says: "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".

The firm's COO Sebastian Hentzschel adds: "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".

BMG will gradually shift to direct deals with the streaming services, beginning with Spotify and Apple Music towards the end of this year. It will continue to outsource physical distribution via a new deal that is expected to be announced shortly.

In his statement yesterday, Coesfeld also thanks Warner and ADA for "their trustful partnership".

Meanwhile, the boss of Warner Music, Robert Kyncl, says: "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”, he continues. “We wish BMG all the best and know that we will have many other opportunities for successful collaboration".

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