Berlin-based music company BMG reported a mixed financial performance for 2025, revealing growth in core profitability and digital revenue alongside a decline in overall revenue. The company, a major player in the music rights management sector, attributed the revenue dip to strategic divestments, specifically the sale of its live music operations. This shift reflects a broader industry trend toward focusing on core competencies and navigating a changing economic landscape for music businesses. BMG’s results, released Thursday, offer a snapshot of the challenges and opportunities facing music companies as they adapt to the streaming era and explore fresh revenue streams.
Despite the overall revenue decrease, BMG demonstrated significant gains in key areas. The company’s adjusted EBITDA margin rose to 32%, a four-percentage-point increase compared to the previous year, reaching 284 million euros (approximately $334 million USD, based on current exchange rates). This indicates improved operational efficiency and a stronger focus on profitable ventures. Digital revenue continues to be a primary driver of growth, now accounting for 71% of total revenue, up from 68% in 2024. This growth is particularly evident in streaming subscription revenue, which saw double-digit increases, though specific figures were not disclosed as BMG’s earnings are consolidated within its parent company, Bertelsmann.
Strategic Shifts and Revenue Adjustments
The 7% decline in total revenue, falling to 900 million euros ($1.06 billion USD) from 963 million euros ($1 billion USD) in 2024, is largely explained by BMG’s deliberate exit from the live music business. In 2023, the company sold its stakes in Karo and Undercover, two companies it had invested in to expand its presence in live events. Billboard reported on this strategic move, highlighting BMG’s intention to concentrate on its core strengths in music publishing and recorded music. Excluding the impact of these divestments, BMG reported an organic revenue decline of 2%, primarily due to unfavorable exchange rates, with the strengthening euro reducing the value of dollar-denominated income.
AI Integration and Catalog Acquisitions
BMG is actively investing in emerging technologies, particularly artificial intelligence (AI), to enhance its operations and unlock new opportunities. The company has expanded its use of generative AI beyond initial applications in marketing to include its sync division, which licenses music for use in film, television, and advertising. BMG has established partnerships with leading AI companies like Google Cloud and OpenAI, as well as the TUM School of Management, to explore the potential of AI in optimizing the connection between music and audiences. According to CEO Thomas Coesfeld, “The real potential of generative AI lies in optimizing the connection between music and its audiences, a reality already unfolding at BMG.”
Alongside technological advancements, BMG continues to aggressively expand its music catalog through acquisitions. In 2025, the company completed 30 acquisitions, including a landmark deal to acquire the catalog of country superstar Jason Aldean for a reported $250 million. Jason Aldean’s catalog, along with stakes in the works of 23 other artists and songwriters, represents BMG’s largest single acquisition to date. This strategy is supported by a $1.5 billion commitment from parent company Bertelsmann to fund catalog acquisitions since 2021, demonstrating a long-term investment in music rights.
Leadership Transition and Potential Acquisition
The company is also undergoing a leadership transition. Thomas Coesfeld, who has served as BMG’s CEO since 2023, has been appointed as the next chairman and CEO of Bertelsmann, effective January. He intends to remain involved with BMG, signaling a continued commitment to the company’s success. Meanwhile, speculation continues regarding a potential acquisition of BMG by Concord, another major player in the music industry. Billboard reported in January that discussions are underway for a deal potentially exceeding $7 billion, though both companies have declined to comment.
This period of change comes after several years of consistent revenue growth under Coesfeld’s leadership. Since joining BMG as CFO in 2021, he has overseen a steady increase in revenue, from 663 million euros ($784.13 million USD) in that year to the 963 million euros reported in 2024 before the recent adjustments. His focus on digital revenue, improved royalty collections, and streamlined digital distribution – including ending BMG’s contract with Warner Music Group’s ADA – have been instrumental in driving this growth.
Looking ahead, BMG will continue to prioritize digital innovation, strategic acquisitions, and efficient operations. The company’s focus on music publishing and recorded music, coupled with its embrace of AI, positions it to navigate the evolving music landscape and capitalize on emerging opportunities. The outcome of potential acquisition talks with Concord remains a key factor to watch in the coming months. Investors and industry observers will be closely monitoring BMG’s performance and strategic direction as it continues to adapt to the dynamic world of music rights management.
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