BMG BOWS NEW ORGANIZATIONAL WORLDWIDE STRATEGY

Rolf Schmidt-Holtz is consolidating his power structure at BMG. Isn’t that what all good Germans do?

The Gutersloh gang has streamlined its worldwide organization in an attempt to further its strategy of "creating global music superstars that reach across geographical boundaries."

Chairman/CEO Schmidt-Holtz announced the changes, which eliminates regional corporate groups in Europe, Asia, and Latin regions, and creates four new groups within BMG: Office of the Chairman, Label Group, Territory Management and Corporate Center, all reporting directly to the Office of the Chairman, led by Schmidt-Holtz.

"This is the latest step in our strategy to make BMG the industry's leading home to world-class artists and top creative executives," said Schmidt-Holtz. "We place a premium on our relationship with our artists. And so this structure allows our creative executives to be closer to artists while allowing us to better support our creative executives."

BMG COO Michael Smellie said the changes build on a company strategy laid out for BMG managers last year. "We want an organization built on record labels with global reach. The labels and our creative executives will be able to work even more closely with artists while being able to rely on powerful and effective global marketing
capabilities."

In addition to Schmidt-Holtz as Chairman and Smellie as COO, the Office of the Chairman also includes newly appointed Executive Vice President Marketing Tim Prescott. Prescott had been Sr. VP of BMG's Asia-Pacific region; he will now be based in New York. Prescott will serve as the company's highest-ranking marketing executive overseeing global marketing campaigns for BMG artists. Also reporting to the Office of
the Chairman are Human Resources, Strategy & New Technology and Corporate Communications.

BMG is organizing in strategic groups. The Label Group will consist of U.S.-based records labels including Arista Records, RCA Music Group, Jive/Zomba and RLG - Nashville, as well as BMG Music Publishing.

Territory Management will consist of major territories and country groups, such as Japan, Germany/Switzerland/Austria, and U.K., Australia, and South Africa. Thomas Stein will lead the German-speaking territories as President, BMG Germany/Switzerland/Austria; Stein had been President BMG Europe. Tim Bowen will lead BMG U.K., Australia, and South Africa; he had been COO BMG Europe. In the newly created position of President, International, Maarten Steinkamp will lead a consolidated International organization comprised of various other countries and territories; he had been Sr. VP Corporate Development. Reporting to Steinkamp is Rodolfo Lopez-Negrete, who had been Sr. VP of the Latin region.

Schmidt-Holtz added that Stein brings deep experience to help build up new repertoire and that his return to leading GSA was a positive sign since the region is one of the world's largest and is a key A&R center for BMG.

BMG Music Publishing Chairman Nicholas Firth will also assume responsibility for Corporate Center, consisting of areas that support BMG operations worldwide, including Legal and Business Affairs, Information Systems & Technology, Finance, and coordination for Manufacturing and Distribution.

The changes were originally laid out last spring when Schmidt-Holtz and Smellie conducted a tour of all BMG operations worldwide hoping to improve relations with artists and create more potent and efficient creative A&R centers.

Further announcements will be made in coming weeks/months related to the new organizational strategy.