Heath Johns on how Australian operations helped BMG’s global revenue grow 28% in the first half of 2017

Image: BMG Australia’s Heath Johns with LDRU

German media conglomerate Bertelsmann cited its Australian operations as one of the factors behind its music label and publishing division BMG’s revenue and profit growth in the first six months of 2017.

A statement following the posting of Bertelsmann’s half-year results stated that BMG’s revenue growth was “driven primarily by the recording and music publishing business in the United Kingdom and the United States, as well as the music publishing business in Australia”.

Revenues were €233 million (A$349.2 million), up 28% from the first half period in 2016 when it totalled €182 million ($272.8 million).

Profit was up 17% to $60.7 million, Bertelsmann said.

The Australian operations have been on a roll since it officially launched in March 2016 under Heath Johns.

Asked what he was most proud of in regards to the Australian company’s achievements, Johns told TMN this morning from New York: “We’ve signed worldwide publishing deals with a diverse range of incredible Australian artists including LDRU, SAFIA, Drapht, Peking Duk (ex-ANZ), The Living End, Wave Racer, Jet, Dead Letter Circus and Wolfmother.

“Via our acquisition of Alberts Music and also our ongoing relationship with the Alberts family, BMG is also proud to represent the publishing rights of AC/DC, Vanda & Young, Montaigne, Urthboy, Josh Pyke, Nicole Millar and many more.”

BMG Australia also launched with a number of Australian acts already signed to the parent company, including Meg Mac, Matt Corby and Tame Impala (ex-ANZ).

Its new headquarters in Sydney’s Surry Hills now has a team of 17 peoplewho Johns says he is “incredibly proud of”.

As for plans for the next 12 months, heexpects the publishing to “continue at a trajectory similar to the last 18 months”.

“In line with the growth of other BMG territories, we are excited about building our recordings operations,” he says.

“We’ve had recent Top 10 records from Nick Cave to Nickelback and some big forthcoming releases from PVRIS, Morrissey, Billy Corgan, Rejjie Snow, Cabbage and Fergie to name only a handful.”

Some new Australian recording deals are to be announced shortly.

“BMG has invested in Australia and NZ because we believe that this market has incredible export potential and we look forward to taking more of our music to the world,” Johns adds.

Globally in the first six months of this year, BMG continued its active acquisition spree, with the strategy that catalogue ownership was the best way to ride the streaming wave.

These included recording deals with Kylie Minogue in the UK, Avril Lavigne and Fergie in the United States and Mando Diao in Germany.

Since then, it has also signed Morrissey and Boy George, and had a UK Top 10 album with The Sherlocks’ Live For the Moment through its Infectious imprint.

On the publishing side, it had success with’Despacito’ (in which it had a writing credit) and DJ Khaled’s hits ’I’m the One’ and ’Wild Thoughts’, as well asRoger Waters’ album Is This The Life We Really Want? (Sony Music) after he flicked his publishing over from Warner/Chappell in 2016.

It also extended its publishing agreements with DJ Khaled and US singer-songwriter Hillary Lindsey.

“BMG clients, including Nickelback (records) and DJ Khaled (music publishing), experienced significant chart success,” noted Bertelsmann.

BMG has also been moving into the US and global country music scene with acquisitions of labels and publishers.

Most notable was Nashville’s BBR Music Group for over US$100 million, which the company described as the “biggest single acquisition in the recording business since BMG’s launch in 2008″.

“The deal gives BMG a significant position in the country music capital of Nashville, Tennessee – and thus in the lucrative country music market.”

BMG’s other country music acquisitions included the labels Broken Bow Records, Stoney Creek Records, Wheelhouse Records and Red Bow Records, as well as the music publishing company Magic Mustang Music.

It also represents the rights to well-known country music artists like Jason Aldean and Dustin Lynch.

BMG now has operations in twelve countries that account for 75-80% of the global music market.

Its intention was not to go into every country, Bertelsmann Chairman and CEO Thomas Rabe said last year, as it would be “inefficient”.