ORLANDO, Fla. — Bertelsmann Music Group North America has won the hotly contested bidding war for distribution rights to Richard Branson’s V2 Records.
The multiyear deal, which closed late last week, is an enormous feather in BMG’s cap, especially considering the conglom bested overtures from Polygram and WEA, the industry’s leading distribber, which handles releases for the Warner Music family.
Sources said the deal was cut under the aegis of BMG Distribution chief Pete Jones, who is credited with selling V2 prexy Dan Beck and parent chief Jeremy Pearce, as well as Branson, on the merits and benefits of inking with BMG.
“We saw a company that really wanted to work with us, saw our special needs in the marketplace and adapted to our philosophy,” Beck told Daily Variety. “We also looked at the achievements (BMG) has had over the past several years and got a lot of positive feedback from the (accounts) on how well they are thought of.”
The pact is also the latest example of just how far BMG has come in the last two years. Landing such a potent and pursued player as Branson shows BMG is no longer perceived by the industry as an also-ran company among the Big Six music congloms.
Though V2 is a start-up, and the marketplace conditions are distinctly different from what they were when Branson first launched a label (Virgin Records), it is widely expected that the gregarious entrepreneur’s new venture will be a success.
Branson sold Virgin to EMI in 1993 for $935 million.
Industry execs suggest BMG landed V2 also because it has streamlined operations, the lowest return rate of its competitors and has seen its market share grow annually.