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Backstreet, Spears hit high notes

BMG Entertainment posted $4.6 billion in revenues during its fiscal year, a $200 million boost from the $4.4 billion logged last year.

The uptick marks the third consecutive year of revenue growth for the German conglom, which is benefiting from a tightly run U.S. operation and turnarounds in several key international territories. BMG doesn’t disclose profits, but industry analysts estimated its operating profit jumped by around 25%. That figure’s particularly impressive, as the music industry’s growth has been flat for the past six months.

Jive Records, home to sales chart kingpins Backstreet Boys and Britney Spears, can be closely linked to BMG’s recent good fortune. BMG owns 20% of the record label arm of Jive parent Zomba Group, which is led by Clive Calder and encompasses the Verity and Silvertone labels.

No. 2 in market share

The boost in revenues for the period ended June 30 comes as BMG is No. 2 in current domestic market share at nearly 18%, compared with less than 13% a year ago. Universal Music Group leads with 30%, helped by its acquisition last year of Polygram.

With hit albums from BMG-owned Arista and RCA record labels, as well as from its relationship with red-hot Jive, the conglom is performing at its peak.

“The company is firing on all cylinders and we have a highly competitive release schedule ahead of us,” Strauss Zelnick, prexy/CEO of BMG Entertainment, told Daily Variety.

But while the upswing continued at RCA and the always-potent Arista posted another record-breaking fiscal year of more than $425 million in revenues, it was the BMG-distributed Jive Records that helped give the conglom a big boost in its current album market share during the fiscal.

Internationally, save for a handful of countries such as Japan and France, the charts are stacked with BMG acts. The company is No. 1 in 10 countries.

“The key to our strength has always been with our local repertoire,” said Rudi Gassner, prexy/CEO of BMG Entertainment Intl., who has shepherded the conglom’s overseas growth for the past dozen years. International revenues typically outpace domestic by around 10%.

BMG boasts more than 200 record labels in 50 countries.

International success

Gassner’s success was supported by strong sales in the Latin American and United Kingdom/Central Europe regions. BMG’s Asia operations experienced a dramatic turnaround that was fueled by BMG Japan’s Misia, who sold more than 3 million albums.

“We continue to have great success with our labels, both in the U.S. and internationally,” said Michael Dornemann, chairman of BMG Entertainment, who also oversees the firm’s broadcast business in addition to music.

BMG had 25 artists whose albums sold more than 1 million units worldwide during the past 12 months, including ‘N Sync, Whitney Houston, Monica, Sarah McLachlan, 112, Eros Ramazzotti, Dave Matthews and Natalie Imbruglia.Contributing to the successful year was an increase in alternative music market share, which rose to 13.5%.

And the once much-maligned Windham Hill Group — which houses Private Music — led the industry in adult contemporary music and added the likes of Jeffrey Osborne, Barry White and Peabo Bryson to its roster of jazz music heavies.

BMG also made headlines last year with its much-ballyhooed joint venture with the Universal Music Group in GetMusic, the online effort to promote artists and sell music.

Though its has yet to directly contribute to the bottom line, it sets the stage for a public offering and competitively positions the company in the nascent e-commerce universe.

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