{"id":45132,"date":"2018-06-10T18:43:11","date_gmt":"2018-06-10T17:43:11","guid":{"rendered":"https:\/\/www.musicbusinessworldwide.com\/?p=45132"},"modified":"2018-06-11T13:48:29","modified_gmt":"2018-06-11T12:48:29","slug":"bmg-boss-hartwig-masuch-warns-over-potential-bursting-bubble-of-publisher-sale-prices","status":"publish","type":"post","link":"https:\/\/www.musicbusinessworldwide.com\/bmg-boss-hartwig-masuch-warns-over-potential-bursting-bubble-of-publisher-sale-prices\/","title":{"rendered":"BMG boss Hartwig Masuch: ‘We are the fourth major music company’"},"content":{"rendered":"

Hartwig Masuch, Chief Executive of BMG, gave a wide-ranging interview at Midem in Cannes last week (June 5), in which he claimed that his company now considers itself the “fourth major”.<\/p>\n

Financially speaking, that’s a fairly bold claim.<\/p>\n

Across its dual music publishing and records businesses, BMG\u00a0turned over $573m last year.<\/a><\/p>\n

Although that was up 22% year-on-year, Warner Music Group – the smallest of the three major music companies – turned over $3.70bn in the same calendar 12 months, more than six times as much as BMG. (Warner also happens to be BMG’s worldwide recorded music distribution partner.)<\/p>\n

Yet according to Masuch, on a practical level – ie. what his company can deliver for its individual artists – it’s a fair comment.<\/p>\n

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\u201cI think we can do whatever you think a major should be able to do,” Masuch told Variety Executive Editor, Shirley Halperin, during their on-stage Midem chat. “Getting the perspective right, yeah, we are the fourth major.<\/p>\n

“Our DNA – by acquiring a lot of very important independent companies – is that we share the values of [those] independent companies, so we have an appreciation of creativity and artists. But our ambition is that we are a major, because being a\u00a0major for me means you have global access to the markets, and you are able to give artists a global perspective on several parameters [across] recording and publishing.<\/p>\n

“It would be foolish to say we\u2019re the leading independent – that would shy away from the real ambition we have.\u201d<\/p>\n

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Masuch was also questioned on the topic of publishing acquisitions, and whether companies in the space are starting to become over-valued.<\/p>\n

To date, ‘new’ BMG – which launched in 2008 – has acquired over 100 independent music companies.<\/p>\n

However, it hasn’t participated in many of the recent high-stakes recent M+A activity in the publishing world – which has seen Round Hill buying Carlin for nearly $250m, Kobalt buy SONGS for around $160m, Concord buy Imagem for over $500m and Sony Corp snap up a 60% chunk of EMI Music Publishing for $2.3bn.<\/p>\n

Masuch warned of “parameters that might create a bursting bubble” in the space, including rising interest rates or the emergence of inter-territory trade barriers.<\/p>\n

He commented: “Saying [the market] is over-valued is always very dangerous, there are a lot of of factors that play into a valuation. [But] if you look at it historically, you could say it\u2019s very, very aggressively valued [today].<\/p>\n

“The question is, can you really make sense of if you are a buyer? I would doubt it for at least 5-10 years going forward, simply because of [unpredictable] parameters that have an influence on your publishing income – global performance [revenues], based on radio and TV, might be very challenged.<\/p>\n

“So if people right now say the music industry is growing 7-10%, publishing might be growing much less… I\u2019d personally rather be careful right now.”<\/p>\n