German media corporation Bertelsmann Music Group reported on Thursday that revenues rose to €8.2 billion ($9.56 billion) in the first half of 2018. This is the highest result in 11 years, with profits more than €501 million ($584 million).
Bertelsmann, Chairman and CEO Thomas Rabe, said first-half growth was determined by its digital and growth businesses.
“Thanks to numerous strategic advances, the international media, services, and education company further improved its growth profile, and again achieved group profit of over half a billion euros,” the company said in a statement.
The most prominent figure in BMG’s H1 2018 results is the growth in recording revenue by 38% on a like-for-like basis when compared to the same period of 2017. Overall, BMG’s recorded music operation now comprises about 35% of overall revenue, or nearly €85 million or $99 million, up from about €62 million ($72 million) in the first half of 2017.
According to the release by Bertelsmann, revenue growth rose by 2.4% (half year 2017, 1.4 percent), while the group’s growth businesses, including music arm BMG, collectively achieved a 9.2% organic increase in revenues to €2.9 billion ($3.38 billion), compared to €2.7 billion in the first half of 2017.
Despite high adverse exchange rate affecting market, revenues were up by 1.3% to €8.2 billion (half year 2017: €8.1 billion). The company added that Bertelsmann generates approximately 20% of its revenues in the U.S.
The company’s operating earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 5.0% to €42 million ($49 million) in the reporting period, compared to €40 million in the same period last year. BMG artists and songwriters achieved significant chart successes in the reporting period, the company said,
“In the recorded music business, this included number-one albums for country star Jason Aldean (United States) and Australian-British singer Kylie Minogue (United Kingdom). In the publishing business, singer/songwriter George Ezra topped the UK album charts, and songwriters signed with the company were involved in three of the five biggest radio hits of the first half of the year in the United States, among other successes.”
In April, BMG acquired Big Bang & Fuzz, one of the leading production music companies in the Asia-Pacific region. In June, BMG took over the catalog of the French singer/songwriter Michel Polnareff, whose publishing rights BMG was already managing.
Unlike the major label competitors and most independent labels, the BMG business model allows its artist to either own their masters and/or have control passed back to them after a certain period of time. This insures a higher payout to artists.