News March 17, 2016

BMG launches in Australia under Heath Johns

The fifth largest music company in the world, the Berlin-based BMG, has launched in Australia, as a stand-alone. It has appointed Heath Johns as Sydney-based Managing Director. Johns was former Director of A&R at Universal Music Publishing Australia.

According to Johns, BMG has already signed a number of Australian names to be announced shortly, and will also be investing considerable time and money in New Zealand. 

Johns is highly regarded for his A&R instincts. While at Universal Music Publishing Australia, which he joined in 2003, he signed up publishing for Wolfmother, Jet, The Veronicas, Peking Duk, M-Phazes, Guy Sebastian, The Living End, Jessica Mauboy, The Veronicas, Timmy Trumpet, The Bamboos, Wave Racer, Gang of Youths, Horrorshow, Little Sea, The Potbelleez, Jackie Onassis, Bag Raiders, Dead Letter Circus, Spit Syndicate, Jonti, Last Dinosaurs, Collide, The Butterfly Effect, Snob Scrilla and Daniel Merriweather.

Over the last year he signed 360, Passenger, Bag Raiders, Marvin Priest, Sietta, Aston Shuffle and Redcoats.

Australia is the eleventh market in which the Berlin-based BMG operates, after Germany, the US, UK, France, Canada, Italy, Scandinavia, Spain, Benelux and China. It has a staff of 450.

According to CISAC, Australia is the seventh biggest market for music publishing collections. IFPI ranks it as the sixth biggest recorded music market.

BMG CEO Hartwig Masuch said: “Australia has long been one of the greatest music producing nations in the world. Australian songwriters and artists are an important element of the BMG catalogue. It is therefore a logical step for us to launch our own operation in Sydney, giving Australian songwriters and artists a genuine alternative to the established companies.

“We are proud to be the only music company in history to set out its stall from day one to offer transparency and service to the people who make the music. A commitment to fairness is in our DNA. We believe these values are as important to Australian music-makers as they are to our clients in the rest of the world.”

Of Johns he said, “(He) has proven himself as a seasoned executive and a persuasive ambassador for Australian music. We are delighted he has agreed to join us.”

BMG already had signed up Australian acts previously. It has the publishing of Tame Impala, Missy Higgins, Matt Corby and Meg Mac, as well as AC/DC for Europe. It also has the recording rights to most of Nick Cave’s catalogue.

German executive Masuch, one time record producer and head of publishing for BMG and Warner for Europe, set up Bertelsmann Rights Management on October 1, 2008. Wihin six years it was generating US$450 million in 2014. Based on revenue, it is Germany’s biggest publisher and fourth biggest publisher in the world.

In terms of recorded music, it started out with 150 master recordings left over from when Bertelsmann sold its share of Sony BMG to Sony Music. Now it represents over 2 million songs and recordings, including the catalogues of Chrysalis, Dreyfus, Bug, Virgin, Mute, Sanctuary, Primary Wave, Skint/Loaded Infectious, Union Square, Vagrant, Rise Records and Talpa Music.

About the reason for setting up the company, Masuch once said, “While virtually everything in the music landscape was changing following the digital revolution, the music industry itself had failed to respond and reform. It was time to start with a blank sheet, and to offer artists and songwriters the fairness, the transparency and the service they deserve.” 

Its approach has been sensible advances and shared risk, with a 70% share of revenue going to the acts. It claims to be the fifth biggest record company in the UK.

Heath Johns says, “What BMG has achieved in just seven years is extraordinary. They have created a new kind of business designed to cater for what songwriters and artists want today. Having met the BMG teams in LA, London and Berlin and having seen the company’s values in action, I am convinced BMG will prove very appealing to Australia’s creative community.”

In the brief Q&A below, Johns tells TMN how BMG’s approach will be implemented locally, where its temporary home base will be, and whether we can expect any local acquisitions in the future.

BMG is relatively new global recordings company, how will you use its youth to your advantage in Australia?
We believe the fact we are new, offering a new kind of approach to artists and songwriters will be just as attractive in Australia as it has proven to be in those territories in which we are already operating. If the traditional music industry was perfect, there wouldn’t be a gap in the market for us.
It is pretty clear that there is a great deal of dissatisfaction among artists and songwriters. BMG was designed in response to what artists and songwriters want today. We believe it’s an advantage to be a brand new player, not tied down to the past and focusing on offering our clients fairness, transparency and great service.
Does BMG have any plans to acquire any Australian music companies?
There’s a strong appetite for growth at this company and it’s no secret we have been acquisitive (100 deals to date since launch), but there is nothing to talk about right now. 
Who will be working out of the Australian office with you?
We are currently actively sourcing staff and you can expect announcements on our initial appointments in the coming months. Building the right company culture at BMG is imperative and we will be choosing our staff and our artists carefully and strategically.
Where in Sydney will BMG Australia reside?
We are temporarily based out of the Penguin Random House building in North Sydney (another company owned by BMG parent Bertelsmann). We are however in the process of sourcing a new premises closer to the creative centre of Sydney.

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