Ever wondered how music companies thrive in the digital age? BMG’s latest earnings report reveals a strategic pivot to streaming, keeping profits strong even as revenue dips. It’s a fascinating look at how industry giants are adapting. What’s next for the future of music?

BMG, a prominent player in the global music industry, has successfully maintained stable earnings in the first half of 2025 despite a noticeable dip in overall revenue. This resilience underscores a strategic refocusing on its core digital music business, a move that has demonstrably bolstered the company’s profitability and market position.

The Berlin-based enterprise reported a revenue of 424 million euros ($463 million) for the initial six months of the year, representing an 8% decrease compared to the previous year. However, the organic revenue, derived from its existing operations, experienced a more modest decline of just 4%, indicating a healthier underlying business performance.

Crucially, operating EBITDA remained flat at 122 million euros ($133 million), which, in conjunction with the reduced revenue, led to an impressive improvement in the EBITDA margin, climbing from 26.5% in the first half of 2024 to 29%. This enhanced profitability is attributed to several strategic factors, including optimized distribution networks, targeted catalog acquisitions, and a sharper focus on its core publishing and recordings segments within the evolving music industry landscape.

A significant driver of BMG’s stable financial results has been the robust growth in music streaming revenue, which posted high single-digit increases, aligning BMG with its larger industry competitors. This digital surge propelled streaming’s contribution to total revenue from 69% to 72% year-over-year. CEO Thomas Coesfeld expresses continued optimism about streaming’s long-term potential, citing rising prices in Western markets and expanding usage, penetration, and royalty pools in rapidly growing international territories.

The deliberate shift towards digital formats also explains the intentional decline in physical product sales, which typically carry lower profit margins. In 2023, BMG divested its interests in live entertainment companies to concentrate solely on its core digital music business. Collaborations with its physical distributor, Universal Music Group, have further refined inventory management, reducing costs even as physical sales decreased.

Catalog acquisitions remain a cornerstone of BMG’s growth strategy for acquiring valuable repertoire. The company significantly ramped up its acquisition efforts, securing 17 catalogs in the first half of the year, a substantial increase from 10 in the prior-year period. While specific details of these deals remain undisclosed, BMG asserts that these strategic investments consistently deliver strong returns and fuel future expansion.

Beyond financial metrics, BMG has celebrated notable artistic successes. Its recorded music division saw standout performances from artists such as Jelly Roll, Spiritbox, and OneRepublic. The period also marked significant signings and extensions with talents like Olly Murs, Evanescence, and i-dle, reinforcing BMG’s commitment to nurturing and expanding its artist roster and contributing to overall strong financial results.

Coesfeld highlighted the strategic importance of new artist partnerships, particularly the deal with pop hitmakers OneRepublic. He noted that the release of their first song, “Beautiful Colors,” strategically positions BMG in the pop genre, especially within the crucial U.S. market, while simultaneously maintaining its strong presence in the country music scene out of Nashville. This dual-pronged approach showcases BMG’s diverse and effective digital music business strategy.