Zelnick goes global at BMG

Exec bumped to prexy-CEO

BMG Entertainment has upped Strauss Zelnick to prexy and CEO of the conglom’s worldwide operation.

The nod to Zelnick, 41, had been anticipated, (Daily Variety, July 10) and gives the hardcharging exec responsibility for overseeing BMG’s $4.4 billion global business, which boasts more than 200 record labels and operations in more than 50 countries.

Previously chief of BMG’s Stateside music and homevideo workings, Zelnick will now be charged with enhancing the conglom’s international position while maintaining domestic growth.

“My enormous confidence in Strauss’ abilities and the success he has achieved in managing BMG in North America enables me to delegate more responsibilities to him,” said Michael Dornemann, chairman of BMG Entertainment, to whom Zelnick will report.

Dornemann — who is also CEO of Bertelsmann Entertainment, the corporate unit that includes Bertelsmann’s interests in CLT-Ufa, Europe’s largest broadcasting operation — said the move was designed so “I can more comfortably balance my own responsibilities for both Bertelsmann’s music and television activities.”

In addition to raising BMG’s music industry profile and creative credibility since joining in 1995, insiders note Zelnick’s ascension also recognizes the exec’s ability to rally the rank and file while managing difficult personalities without any Draconian tendencies.

“I think he’s adapted himself to the industry in a remarkable manner,” Doug Morris, worldwide CEO and chairman of Universal Music Group, told Daily Variety. “And I think he is doing a terrific job, as evidenced by how well the company is doing overall and at each of the labels. And he’s a nice guy, too.”

For the first half of 1998, BMG ranked fourth among the congloms and logged a 13.8% current album market share.

Zelnick will benefit from the solid platform put in place by Rudi Gassner, prexy and CEO of BMG Intl., who launched the conglom’s overseas operation more than 10 years ago. Gassner will report to Zelnick.

During that time, Gassner had achieved success translating Stateside acts from BMG-owned labels, such as Arista and RCA, into overseas stars, while also developing local artists whose repertoire fills the conglom’s coffers.

“Rudi has done an outstanding job of building our international business over the past 10 years and will continue to oversee BMG’s international operation,” said Dornemann. “(He will) work closely with Strauss to maximize opportunities in America and around the world for our artists and companies.”

Dangerous marketplace

Shifting tastes, artists whose music doesn’t cross borders and economic problems in the Asian sector have combined recently to make the overseas marketplace, which is already suffering from flat sales on the retail side, a music industry minefield.

Zelnick said his first mission will be to get the lay of the international land.

“What I will first do is travel with Rudi to the territories to get a sense of how international works,” Zelnick told Daily Variety. “I’m very impressed with all of our regional execs, and I look forward to working closely with them and Rudi.”

While Arista has always been BMG’s crown jewel and operates without interference, Zelnick’s contributions to BMG’s Stateside operations are evident in the turnaround experienced at RCA Records and Windham Hill, labels that are firing on all cylinders as a result of Zelnick’s guidance.

The company is expected next week to announce record revenues for the second consecutive year, with domestic profits growing 25% on a nearly $2 billion tally, up from $1.7 billion during its fiscal year 1996-97.

“Strauss has done an outstanding job since joining BMG … and the importance of American repertoire to our worldwide operations makes him the logical choice to oversee our music activities,” said Dornemann.

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