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Sony BMG Music Entertainment (2004)

Sony BMG

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Sony BMG Music Entertainment was a recorded music company, which was a 50–50 joint venture between the Sony Corporation of America and Bertelsmann AG. The venture’s successor, the again-active Sony Music Entertainment, is 100% owned by the Sony Corporation of America.


Sony BMG Music Entertainment began as the result of a 50–50 joint venture between Sony Music Entertainment and Bertelsmann Music Group completed on March 4, 2004. It is one of the Big Four music companies, and includes ownership and distribution of recording labels such as Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Victor Records, RCA Records, Legacy Recordings, Sonic Wave America, and others. The merger affected all Sony Music and Bertelsmann Music Group companies worldwide except for Japan, where it was felt that it would reduce competition in that country’s music industry significantly.

Financial analysts covering the merger anticipated that up to 2,000 jobs would be cut as a result, saving Sony BMG approximately $350 million annually.

The company's Chief Executive Officer is Rolf Schmidt-Holtz, who succeeded Andrew Lack on February 10, 2006. In the first half of 2005, the company's share of new releases in the United States declined from 33% to 26% according to Nielsen SoundScan. This, and Lack's negotiation of what some called an "ill-conceived" deal with Bruce Springsteen led to Bertelsmann informing Sony that it would not renew Lack's contract.

The company signed a content deal with the popular video sharing community YouTube.

On August 5, 2008 Sony Corp. agreed to buy Bertelsmann AG's 50 percent stake in the music company for $1.2 billion to get full control. The music company will be renamed Sony Music Entertainment Inc. and will become a unit of Sony Corporation of America. This will allow Sony the rights to artists on the current and historic BMG roster and would allow Sony Corporation to better integrate its functions with its PlayStation 3 and upcoming new media initiatives.

 The merger
On March 27, 2006, the New York Times reported that Bertelsmann was in talks with Sony to possibly alter the current venture. Two executives close to Sony BMG said that Bertelsmann may offer Sony its half of the company in order to raise money by leveraging some of its media assets. Executives close to the label have stressed that any such agreement will likely take months to conclude.

On July 13, 2006, however, the European Court of First Instance annulled the European Commission's clearance decision as IMPALA had applied for. This judgment was appealed by the merging parties. On October 3, 2007, after a new investigation, the European Commission upheld its prior approval of the merger.

It was announced in March 2007 that Sony Music Entertainment Japan, which is not part of Sony BMG, would dismantle the Tofu Records label. All of the SMEJ artists will be now signed to Epic or Columbia.

The international media and entertainment companies Sony Corporation and Bertelsmann AG announced on August 5, 2008, that Sony has agreed to acquire Bertelsmann's 50% stake in Sony BMG. The music company, to be called Sony Music Entertainment Inc. , will become a wholly owned subsidiary of Sony Corporation of America.

On October 1, 2008, Sony Corporation completed the acquisition of Bertelsmann's 50% stake in the companies' joint venture, and the company was renamed as Sony Music Entertainment on December 1, 2008. The music company is now a wholly owned subsidiary of Sony Corporation of America and operates music labels such as Arista Records, Upstate Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Records and Zomba Records. The sale price was not disclosed when the deal was announced in August, but news reports valued it at $1.5 billion.

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Whole or part of the information contained in this card come from the Wikipedia article "Sony BMG", licensed under CC-BY-SA full list of contributors here.