The Music Entrepreneur – A Portrait of Thomas Coesfeld

News | Corporate | Berlin/Gütersloh, 07/04/2024

The Music Entrepreneur - A Portrait of Thomas Coesfeld

Thomas Coesfeld, CEO of BMG for a year now, sees himself as a music executive of the next generation. As someone who uses his management skills to support and promote musicians and songwriters, artists and creatives, and to lead them to commercial success - just like the entire music company with its more than 1,000 employees around the world. The 34-year-old has already succeeded in increasing BMG's profitability. With the same self-image as a manager and the same expectations of himself, he now takes a seat on the Bertelsmann Executive Board, where he will represent BMG, a classic media business with a very long tradition at Bertelsmann, dating back to 1958.

Thomas Coesfeld has been at the helm of BMG as CEO since July 1, 2023, almost exactly one year to the day. The Financial Times described his appointment as a "good choice to continue the solid financial management at BMG" because he understands the business "extremely well." Soon afterwards, the German business paper "Handelsblatt" named Coesfeld as one of its "Managers of the Future." Just a few weeks ago, the renowned U.S. music magazine "Billboard" included Thomas Coesfeld alongside other top BMG managers in its list of "Indie Power Players," having already recognized him shortly before as one of the "International Power Players." And in October, the "Frankfurter Allgemeine Zeitung" acknowledged that he had already set the course for BMG during his short time in office, referring in particular to the decision to have the company handle its own digital distribution.

Thomas Coesfeld himself also feels this was a landmark step. In an interview marking his first 100 days in office, he elaborates on his first far-reaching decision as CEO: "This is a milestone for BMG that puts the streaming business absolutely in the focus of our actions. The entire area of digital distribution represents around 300 million euros in annual revenue for BMG. We are now signing direct contracts with the major streaming services such as Spotify and Apple Music, giving us access to immensely valuable streaming and trending data." And, he adds "A second important point is that we will be able to pay out streaming royalties to our artists much faster in the future, up to four months earlier." The aim of Coesfeld's first major entrepreneurial/business move is the targeted, cross-channel marketing of artists and their works. It is one of many pieces of the mosaic with which BMG aims to increasingly become the preferred partner for the development and global marketing of artists.

Technology plays a key role

His move to bring digital distribution inhouse also underscores how systematically Thomas Coesfeld is focusing the company on digital revenue streams. Nor was it by any means the only major decision he has made as BMG CEO in the past twelve months. Among other things, he evolved and implemented the BMG Next strategy to further boost the company's performance and profitability. Under his leadership, BMG is concentrating on its fast-growing core businesses, Publishing and Recordings, while fringe businesses such as live events have been discontinued or disposed of. Under Bertelsmann's Boost strategy, more than €800 million have been invested at BMG under Coesfeld's direction as CFO and later as CEO.

Technology plays a key role in Coesfeld's strategic thinking for BMG, especially when it comes to using data analytics and artificial intelligence. Specifically, he supervised the design and implementation of an industry-leading, data-driven investment model based on advanced data analytics and streaming forecasting models. He also improved BMG's monetization and marketing capabilities thanks to data analytics. In its collaboration with the Technical University of Munich, BMG has begun using solutions for AI-based rights marketing.

Thomas Coesfeld appointed new people to several top management positions around the world and restructured teams. For example, the global marketing, sales and catalog organizations were centralized and tailored to the needs of global partners such as Apple Music, Spotify, and YouTube.

As the world's largest, most important, and fastest-growing music market, the U.S. plays an increasingly important role in BMG's strategy and structure, so on his inaugural tour Thomas Coesfeld traveled from Berlin not only to London, but also to visit BMG's major U.S. locations: New York and Los Angeles, which is playing an increasingly central role in the music world, as well as Nashville. After systematically focusing on Country music early on, BMG's business there is doing particularly well. And of course there have been major new artist signings and catalog purchases during his tenure, most notably with Jennifer Lopez and Paul Simon, who both entrusted their music to BMG. Add to that investments in the rights of artists including Tina Turner, John McVie, Jean-Michel Jarre, Mötley Crüe, John Legend, Martin Solveig, ZZ Top, Jet, Chris Rea, Simple Minds, Workshow, Fitz and the Tantrums, Juicy J, Manic Street Preacher, Camille Purcell, and Snap.

Having personal contact with the creative minds of the music world still feels like a special experience in his life as a manager, although Thomas Coesfeld has been talking and negotiating with creative music professionals as CFO of BMG since 2021 and has sat on the BMG management board since October 2020. Listening to Jennifer Lopez's new album for the first time in her home; talking to the newly crowned Grammy winner Lainey Wilson and her colleague Jelly Roll, BMG's two most important country stars; meeting superstars like Kylie Minogue, or visiting Tina Turner at her home in Zurich, which Thomas Coesfeld did several times before her death in May 2023; - all of these are lasting impressions and experiences for his work with established artists and new talents.

Coesfeld brings clear ideas about the most important tasks of a top manager at Bertelsmann to his new role as member of the Group's Executive Board. To guarantee the success of a business, he says that in addition to the right strategy, you need the right people in the right positions - and the right culture for BMG's more than 1,000 employees as well as Bertelsmann's 80,000 employees. Coesfeld's belief: "Everyone should feel that their work is meaningful, and they should enjoy doing it."

AI as a huge opportunity - and challenge

There is possibly no other topic for which it is as important to keep employees - and creatives - engaged and on board as in the use of artificial intelligence in the music business: BMG has been working with artificial intelligence in the Production Music and Synch segments for a long time. Here, AI is used to analyze and describe songs in order to make custom recommendations for customers. According to Thomas Coesfeld, the emergence of generative AI, i.e. artificial intelligence that can independently create content such as text, music, and images, is now opening up completely new possibilities. "For example, when we develop a 20-second clip for a new release that is published on TikTok or other platforms, we use generative AI to create marketing assets such as graphics, images, and short videos."

But, he notes, an even more exciting process is using generative AI to improve the quality of existing music. Entirely new ways of creating, improving and marketing music are conceivable here. "Overall, I see this as a huge opportunity," continues Thomas Coesfeld. "Of course, generative AI poses major challenges for the definition of copyright. But I am very optimistic that the industry will find solutions, for example by using 'digital watermarking' for songs." BMG is committed to working with the music industry to find solutions to these problems.

Communicating painful decisions clearly

Before joining BMG in fall 2020, Thomas Coesfeld was a member of the Executive Board of the former Bertelsmann Printing Group (now Bertelsmann Marketing Services) and Chief Strategy Officer (CSO) of Mohn Media in Gütersloh. During his time as Head of Strategy at Mohn Media, Thomas Coesfeld proved that he doesn't shy away from difficult decisions if they are in the best interests of the company or unavoidable to secure its future. In view of the structural decline in the printing business, he was jointly responsible for the successful adjustment of important customer contracts and for cost reductions at Mohn Media, as well as for necessary personnel measures - in one of Bertelsmann's oldest businesses. "I learned that you have to make decisions, including the difficult ones, with clarity, but you also have to communicate them clearly," Coesfeld later told "Handelsblatt," and at the same time was able to announce that the savings in tens of millions would become existentially important for Mohn Media when energy costs skyrocketed shortly afterwards in the wake of Russia's attack on Ukraine.

Thomas Coesfeld began his Bertelsmann career at the beginning of 2016 following his first professional stint at the management consultancy McKinsey. As a participant in the Bertelsmann Entrepreneurs Program (BEP), he worked for Group subsidiaries including BMG and Relias, a Bertelsmann Education Group company in the U.S. that is one of the leading providers of online training in the healthcare sector. Thomas Coesfeld's studies in business administration had already taken him from Vallendar in Rhineland-Palatinate to the U.S., first to Washington and then to Atlanta. And especially these days, especially in the music business, he once again feels a very close connection to the United States. He is constantly traveling there to meet with artists, creatives and his top management, as well as with important tech partners Spotify, Apple, and YouTube, to negotiate contracts and advance BMG's music business. He therefore spends a large part of his working time in the U.S. or traveling.

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