BMG Holds Steady on Earnings as Revenue Dips in First Half of 2025

Focusing on its core digital music business helped BMG keep earnings steady on lower revenue in the first half of 2025, the company reported Thursday (Aug. 28). The Berlin-based company had revenue of 424 million euros ($463 million) in the first six months of the year, down 8% from the prior-year period. Organic revenue — income from existing operations — fell just 4%. 

Operating EBITDA was flat at 122 million euros ($133 million). With the reduction in revenue, EBITDA margin improved to 29% from 26.5% in the first half of 2024. The margin improvement was the result of numerous factors, CEO Thomas Coesfeld told Billboard. “It’s distribution, it’s catalog acquisitions, and first and foremost, it’s about focusing the business, for the time being, on publishing and recordings.” 

Music streaming revenue had high single-digit growth, which put BMG on par with its larger competitors. That helped push digital’s share of total revenue to 72% from 69% a year earlier. While subscriber growth has slowed in major markets, Coesfeld is “optimistic” about streaming’s ability to drive continuing growth. “It’s prices in the Western world, and it’s usage expansion, penetration and our [royalty] pool increases in all fast-growing markets.”

The revenue decline was also the result of greater emphasis on digital. Back in 2023, not long after Coesfeld took the CEO role, BMG sold its stakes in two live entertainment companies, Undercover and Karo, to focus on its core businesses. Physical product, which has lower margins than digital formats, also played a lesser role in the first half of the year. The decline in physical sales was “very intentional,” said Coesfeld, adding that BMG’s physical distributor, Universal Music Group, has helped with forecasting and adjusting order sizes to reduce inventory on hand. As a result, he said, physical sales declined but costs improved.

BMG, which has grown through numerous acquisitions since its founding in 2008, continues to see catalog acquisitions as “the centerpiece” of its strategy to acquire repertoire. BMG acquired 17 catalogs in the first half of the year, up from 10 in the prior-year period. While details on the acquisitions were not revealed, the company claimed the deals were “consistently delivering strong returns and fueling future growth.” 

Coesfeld also pointed to the successes of the front-line division in the U.S. headed by John Loba. In the first half of the year, BMG’s recorded music division had standout success from Jelly Roll, Spiritbox, yung kai, Wiz Khalifa and Billy Idol, among others. Signings and extensions in the period include MeeK, Olly Murs, Evanescence, Mark Keller, i-dle, Joyce Wrice, Fredrik and Jessi. A deal with pop hitmakers OneRepublic was announced in July.

“The first song [“Beautiful Colors”] being released by OneRepublic, that puts BMG in a different position compared to last year,” said Coesfeld. “It’s in pop, it’s in the U.S. And, still, at the same time, we keep releasing great songs in [the] country [genre] in the U.S. out of Nashville.” 

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