UMG to Handle Physical Distribution for BMG Under New Alliance

BMG said on Thursday (Oct. 18) that it will use Universal Music Group’s (UMG) commercial services division for the distribution of its physical recorded music, in what BMG CEO Thomas Coesfeld described as the first project of a burgeoning “alliance.”

Last month, BMG announced it was winding down its agreement with Warner Music Group’s ADA and would be taking over direct management of its 80-billion-stream digital distribution later this year. Digital revenues contributed 70% of BMG’s overall revenues in 2022.

BMG said it enlisted the world’s biggest music company for the distribution of its vinyl and CDs to provide artists like Jelly Roll, Kylie Minogue and Lainey Wilson with a wider range of services. BMG, the fourth biggest music company, said it and UMG are also discussing “exploring shared positions on industry matters [and] joining forces in adjacent business lines.”

“We are delighted to partner with UMG, the world leader in music-based entertainment on our thriving physical recorded music business,” said Coesfeld, who took over from longstanding chief executive Hartwig Masuch July 1. “Our alliance with UMG is a significant step to further enhance our service to BMG-signed artists. Their scale, technology and commitment promises to further expand opportunities for BMG-signed artists around the world.”

UMG has been actively seeking partners this year on vexing industry topics like streaming economics –see its experiments with Deezer and Tidal — and artificial intelligence — for which it’s pacted with BandLab and functional music company Endel.

Business alliances between two of the world’s four largest music companies are less common, but BMG CEO Coesfeld has signaled an interest in exploring atypical solutions to scale the Berlin-based company’s business.

“BMG has brought a fresh vision to the music business, and we look forward to partnering with BMG on a variety of initiatives to provide greater opportunities to artists and our respective companies,” UMG chairman/CEO Sir Lucian Grainge said in the statement.