Sony BMG Music Entertainment
Sony BMG Music Entertainment, Inc. is the result of a 50/50
joint venture between
Sony Music Entertainment (part of
Sony) and
BMG Entertainment (part of
Bertelsmann) completed on
August 5,
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,
RCA Victor Records,
RCA Records,
Legacy Recordings,
Sonic Wave America, and others.
Financial analysts covering the merger anticipated that up to 2000 jobs could be cut as a result, saving Sony BMG approximately
$350 million annually.
The company's
Chief Executive Officer (CEO) is
Rolf Schmidt-Holz, who succeeded
Andy Lack on February 10, 2006. In the first half of
2005, the company's share of new releases in the
United States (US) 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. Lack now holds the position of Chairman of the Board, the position formerly occupied by Schmidt-Holz.
* In
July 2005, Sony BMG was fined 10 million dollars after the
New York Attorney General's office determined that they had been practicing
payola mostly in the form of direct payments to radio stations and bribes to
disc jockeys to promote various artists including
Franz Ferdinand,
Audioslave,
Celine Dion and mainly
Jessica Simpson.
Epic Records, one of their labels, was specifically cited for using fake contests in order to hide the fact that the gifts were going to disc jockeys rather than listeners .
* In
October and
November 2005, a controversy over
digital rights management(DRM) software produced and shipped by this company ensued; see
2005 Sony CD copy protection scandal. On
November 16,
2005 US-CERT, the United States Computer Emergency Readiness Team, part of the
United States Department of Homeland Security, issued an advisory on
Extended Copy Protection DRM, citing the XCP use of
rootkit technology to hide certain files from the computer user as a security threat to computer users and saying that one of the uninstallation options provided by Sony also introduced vulnerabilities to a system. US-CERT advised, "Do not install software from sources that you do not expect to contain software, such as an audio CD." [
1] In its "Top Flops of '05" issue, the enterprise newsweekly
eWeek had to create a new category for the "Sony BMG root-kit fiasco."
Peter Coffee, of
eWeek Labs reported, "The Sony brand name was already in troubleā"it lost 16 percent of its value between 2004 and 2005.... Now it has taken a body blow among tech-product opinion leaders. We've never done it before, and we hope we'll never have occasion to do it again but, for 2005, eWeek Labs awards a stupid tech trick
grand prize to Sony."
eWeek Vol. 22, No.50
On March 27, 2006, the
New York Times reported that Bertlesmann was in talks with
Sony to possibly alter the current venture. Two executives close to Sony BMG have said that Bertlesmann may offer Sony its half of the company in order to raise money by leveraging some of its media assets. Executives close to Sony BMG have stressed that any such agreement will likely take months to conclude. [
2]
On
July 13,
2006, however, the
European Union annulled the merger as IMPALA (a trade association for independent labels in Europe)had asked, ruling that the two companies must end their venture and become separate companies once again in order to have fair competition with independent labels. The case is being appealed. It is currently viewed as unlikely that the
EC will indeed split them forcibly.[
3] It is possible it may simply instead force them to sell a proportion of their assets or labels. This may also affect the possible sale of Bertlesmann's share of the company to Sony. If the company is indeed allowed to continue in its current form, it is possible the European Commission might block a complete takeover by any entity.
*
Brightside Recordings*
BMG Latin*
Bros Records*
Burgundy Records*
Columbia Records**
C2 Records**
Loud Records*
Epic Records**
Caribou Records**
Daylight Records**
550 Music**
Ruthless Records*
Legacy Recordings**
Windham Hill Records*
Ode Records*
Ravenous Records*
RCA Music Group**
RCA Records**
RCA Victor Records**
Arista Records/
J Records**
Bluebird Records**
Phonogenic Records*
Provident Music Group**
Provident Label Group***
Brentwood Records***
Benson Records***
Essential Records***
Flicker Records***
Beach Street Records***
Reunion Records***
Praise Hymn Music Group***
Provident Special Markets**
Provident-Integrity Distribution*
Sony BMG Nashville**
Arista Nashville**
BNA Records**
RCA Nashville*
Sony BMG Masterworks**
RCA Red Seal**
Sony Classical**
deutsche harmonia mundi**
Arte Nova Classics*
Sony Wonder*
Sony Urban Music*
Zomba Music Group**
Battery Records**
Epidemic Records**
La Face Records**
Jive Records**
Music for Nations Records**
Pinacle Records**
Rough Trade Records**
Silvertone Records**
So So Def Records**
Verity Records**
Volcano Records/Zoo Records**
X-Cell Records*
RED Distribution*
Sony BMG International Companies*
Sony DiscosIndependent labels distributed by Sony BMG
Nick RecordsIn Japan, Sony's Japanese recorded music subsidiary continues to operate independently of Sony BMG due to the strength and size of its business. BMG's former Japanese subsidiary is part of Sony BMG.
*
Sony Settles Payola Investigation from the Office of the Attorney General of New York [
4].
*Leonard, Devin (Nov. 28, 2005). "Music Lessons".
Fortune, pp. 31–32.
*
Big Four*
Official site*
Yahoo! - Sony BMG Music Entertainment Company Profile*
Music press coverage of Sony BMG merger completion*
Business press coverage of merger completion*
Groklaw page on SonyBMG DRM issues and litigation*
SonyBMG Litigation and Rootkit Info
