Sony BMG

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Sony BMG Music Entertainment
Joint venture (Delaware general partnership)
IndustryMusic and entertainment
Fate Bertelsmann's share acquired by Sony
Successors
FoundedMarch 4, 2004;15 years ago (2004-03-04)
DefunctOctober 1, 2008 (2008-10-01)
Headquarters,
United States
Key people
David Gordon: chairman Sound & Vision
OwnersEach of 50% owned by:
Website "http://sonybmg.com/". Archived from the original on January 1, 2006.

Sony BMG Music Entertainment was an American record company owned as a 50–50 joint venture between Sony Corporation of America and Bertelsmann Music Group. The venture's successor, the revived Sony Music, is wholly owned by Sony, following their buyout of the remaining 50% held by Bertelsmann. BMG was instead rebuilt as BMG Rights Management on the basis of 200 remaining artists.

Sony Corporation of America United States subsidiary of Japans Sony corporation

Sony Corporation of America (SCA), based in New York City, is a subsidiary of the Japanese conglomerate Sony Corporation. It serves as the company's US headquarters, and manages the company's US-based businesses.

Bertelsmann Music Group Record label company

Bertelsmann Music Group was a division of German media company Bertelsmann before its completion of sale of the majority of its assets to Sony Corporation of America on 1 October 2008. Although it was established in 1987, the music company was formed as RCA/Ariola International in 1984 as a joint venture to combine the music label activities of RCA Corporation's RCA Records division and Bertelsmann's Ariola Records and its associated labels which include Arista Records. It consisted of the BMG Music Publishing company, the world's third largest music publisher and the world's largest independent music publisher, and the 50% share of the joint venture with Sony Music, which established the German American Sony BMG from 2004 to 2008.

Sony Music American music company

Sony Music Entertainment (SME), known as Sony Music, is an American global music conglomerate owned by Sony Corporation of America and incorporated as a general partnership of Sony Music Holdings Inc. through Sony Entertainment, a subsidiary of the Japanese conglomerate Sony. It was originally founded in 1929 as American Record Corporation and renamed as Columbia Recording Corporation in 1938, following its acquisition by the Columbia Broadcasting System. In 1966, the company was reorganized to become CBS Records, and Sony Corporation bought the company in 1988, renaming it under its current name in 1991. In 2004, Sony and Bertelsmann established a 50-50 joint venture known as Sony BMG Music Entertainment, which transferred the businesses of Sony Music and Bertelsmann Music Group into one entity. However, in 2008, Sony acquired Bertelsmann's stake, and the company reverted to the SME name shortly after; the buyout allowed Sony to acquire all of BMG's labels, and led to the dissolution of BMG, which instead relaunched as BMG Rights Management.

Contents

History

Sony BMG Music Entertainment began as the result of a 50–50 joint venture between Sony Music (part of Sony) and Bertelsmann Music Group (part of Bertelsmann) 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, Mchenry 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.

Arista Records, Inc. is an American record label owned by Sony Music, a subsidiary of Sony Corporation of America, the North American division of the Japanese conglomerate Sony. The label was previously handled by Bertelsmann Music Group. The label was founded in 1974 by Clive Davis, who formerly worked for Columbia Records. Until its demise in 2011, it was a major distributor and promoter of albums throughout the United States and the United Kingdom. Along with Columbia, RCA, and Epic, Arista is one of Sony's four flagship record labels.

Columbia Records American record label; currently owned by Sony Music Entertainment

Columbia Records is an American record label owned by Sony Music Entertainment, a subsidiary of Sony Corporation of America, the North American division of Japanese conglomerate Sony. It was founded in 1887, evolving from the American Graphophone Company, the successor to the Volta Graphophone Company. Columbia is the oldest surviving brand name in the recorded sound business, and the second major company to produce records. From 1961 to 1990, Columbia recordings were released outside North America under the name CBS Records to avoid confusion with EMI's Columbia Graphophone Company. Columbia is one of Sony Music's four flagship record labels, alongside former longtime rival RCA Records, as well as Arista Records and Epic Records.

Epic Records American record label

Epic Records is an American record label owned by Sony Music Entertainment, a subsidiary of Sony Corporation of America, Inc., the North American division of Japanese conglomerate Sony. The label was founded predominantly as a jazz and classical music label in 1953, but later expanded its scope to include a more diverse range of genres, including pop, R&B, rock, and hip hop. Epic Records has released music by artists including Glenn Miller, Tammy Wynette, George Michael, The Yardbirds, Donovan, Shakin Stevens, Europe, Cheap Trick, Meat Loaf, Stevie Ray Vaughan, Ted Nugent, Shakira, Sly & the Family Stone, The Hollies, Celine Dion, ABBA, Culture Club, Boston, Dave Clark Five, Gloria Estefan, Pearl Jam, Rage Against the Machine, and Michael Jackson. Along with Arista, Columbia and RCA Records, Epic is one of Sony Music Entertainment's four flagship record labels.

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.

United States dollar Currency of the United States of America

The United States dollar is the official currency of the United States and its territories per the United States Constitution since 1792. In practice, the dollar is divided into 100 smaller cent (¢) units, but is occasionally divided into 1000 mills (₥) for accounting. The circulating paper money consists of Federal Reserve Notes that are denominated in United States dollars.

The company's chief executive officer (CEO) 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 (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.

Nielsen SoundScan is an information and sales tracking system created by Mike Fine and Mike Shalett in 1991. SoundScan is a method of tracking sales of music and music video products throughout the United States and Canada. Data is collected weekly and made available every Sunday and every Monday to subscribers, which include record companies, publishing firms, music retailers, independent promoters, film and TV companies, and artist managers. The Nielsen SoundScan is the sales source for the Billboard music charts, making it the largest source of sales records in the music industry.

Bruce Springsteen American singer and songwriter

Bruce Frederick Joseph Springsteen, nicknamed "The Boss," is an American singer, songwriter, and musician who is a solo artist and is the leader of the E Street Band. Springsteen received critical acclaim for his early 1970s albums and attained worldwide fame upon the release of Born to Run in 1975. During a career that has spanned five decades, Springsteen has become known for his poetic and socially conscious lyrics and for his lengthy, energetic stage performances. He has recorded both rock albums and folk-oriented works, and his lyrics often address the experiences and struggles of working-class Americans.

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

On August 5, 2008 Sony Corporation agreed to buy Bertelsmann AG's 50 percent stake in the music company for $1.2 billion to get full control. The music company was renamed Sony Music Entertainment and became a unit of Sony Corporation of America. [1] This allowed Sony the rights to artists on the current and historic BMG roster and allowed Sony Corporation to better integrate its functions with its PlayStation 3 and upcoming new media initiatives. As part of the buyout, Bertelsmann kept the rights to master recordings by 200 artists, which formed the basis for a second version of BMG.

BMG Rights Management international music company

BMG Rights Management GmbH is an international music company based in Berlin, Germany. It combines the activities of a music publisher and a record label.

Sony and Bertelsmann last teamed up in 2013, in a failed bid to acquire Parlophone from Universal Music Group. BMG would administer the label's back catalogue, while its current artists would sign with Sony. [2] While Sony BMG failed to win Parlophone (which ultimately went to Warner Music Group), BMG acquired Mute Records' back catalogue and licensed Depeche Mode and the catalogue of The Echo Label to Sony. [3]

Parlophone German-British record label

Parlophone Records Limited is a German-British record label founded in Germany in 1896 by the Carl Lindström Company as Parlophon. The British branch of the label was founded on 8 August 1923 as The Parlophone Company Limited , which developed a reputation in the 1920s as a jazz record label. On 5 October 1926, the Columbia Graphophone Company acquired Parlophone's business, name, logo, and release library, and merged with the Gramophone Company on 31 March 1931 to become Electric & Musical Industries Limited (EMI). George Martin joined Parlophone in 1950 as assistant label manager, taking over as manager in 1955. Martin produced and released a mix of product, including recordings by comedian Peter Sellers, pianist Mrs Mills, and teen idol Adam Faith.

Universal Music Group American music corporation

Universal Music Group is an American global music corporation that is a subsidiary of the French media conglomerate Vivendi. UMG's global corporate headquarters are located in Santa Monica, California. It is considered one of the "Big Three" music companies, along with Sony Music and Warner Music Group. Since 2004, the corporation is no longer related to the film studio Universal Studios. In 2019, Fast Company named Universal Music Group the most innovative music company and listed UMG among the Top 50 most innovative companies in the world and "amid the music industry's digital transformation, Universal is redefining what a modern label should look like." UMG has signed licensing agreements with more than 400 platforms worldwide.

Warner Music Group American global music conglomerate

Warner Music Group Inc. (WMG), also known as Warner Music, is an American multinational entertainment and record label conglomerate headquartered in New York City. It is one of the "big three" recording companies and the third largest in the global music industry, after Universal Music Group (UMG) and Sony Music Entertainment (SME). Formerly part of Time Warner, the company was publicly traded on the New York Stock Exchange until May 2011, when it announced its privatization and sale to Access Industries, which was completed in July 2011. With a multibillion-dollar annual turnover, WMG employs more than 3,500 people and has operations in more than 50 countries throughout the world.

Controversies

Payola fine

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, 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. [4]

Rootkit scandal

On 31 October 2005, a scandal erupted over digital rights management (DRM) software produced and shipped by Sony BMG that automatically installed itself on people's computers and made them more vulnerable to computer viruses. The scandal and attendant controversy about the practice of software auto-installation spawned several lawsuits. Sony BMG eventually recalled all of the affected CDs.

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, saying that a Sony-provided uninstallation option also introduced computer system vulnerabilities.

US-CERT advised, "Do not install software from sources that you do not expect to contain software, such as an audio CD." [5] 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 trouble—it lost 16 percent of its value between 2004 and 2005....

Now it has taken a blow among tech-product opinion leaders. "We've never done it before, and we hope we'll never have [an] occasion to do it again but, for 2005, eWeek Labs awards a Stupid Tech Trick grand prize to Sony." eWeek Vol. 22, No.50

Kazaa file-sharing lawsuit

In October 2007, Sony BMG, alongside other large music firms, successfully sued Jammie Thomas for making 24 songs available for download on the Kazaa file-sharing network. Thomas, who made US$36,000 a year, was ordered to pay US$222,000 in damages. Thomas had allegedly shared 1702 files in total; the court upholding the award called it an "aggravated case of willful infringement". [6]

Children's online privacy violations

In 2008, the Federal Trade Commission sued Sony BMG for collecting and displaying personal data of 30,000 minors without parental consent via its websites since 2004, violating the Federal Trade Commission Act and the Children's Online Privacy Protection Act. Sony did not restrict minor children's participation in its websites. Sony paid a $1 million fine. [7]

See also

Related Research Articles

EMI British music recording and publishing company

EMI Group Limited was a British transnational conglomerate founded in March 1931 in London. At the time of its break-up in 2012, it was the fourth largest business group and record label conglomerate in the music industry, and was one of the big four record companies ; its labels included EMI Records, Parlophone, Virgin Records, and Capitol Records, which are now owned by other companies.

RCA Records is an American record label owned by Sony Music, a subsidiary of Sony Corporation of America. It is one of Sony Music's four flagship labels, alongside RCA's former long-time rival Columbia Records, Arista Records, and Epic Records. The label has released multiple genres of music, including pop, classical, rock, hip hop, afrobeat, electronic, R&B, blues, jazz, and country. Its name is derived from the initials of its defunct parent company, the Radio Corporation of America (RCA). It was fully acquired by Bertelsmann in 1986, making it a part of Bertelsmann Music Group (BMG); however, RCA Records became a part of Sony BMG Music Entertainment, a merger between BMG and Sony Music, in 2004, and was acquired by the latter in 2008, after the dissolution of Sony BMG and the restructuring of Sony Music. It is the second oldest record label in American history, after sister label Columbia Records.

Jive Records American record label

Jive Records was an American record label under the RCA Music Group formed in 1981 by Zomba Records. Formerly headquartered in New York City, the label was best known for a string of successes with hip hop artists in the 1980s, and also in teen pop and boy bands during the 1990s and early 2000s.

Ariola Records German record label

Ariola Records is a German record label. In the late 1980s, it was a subsidiary label of Bertelsmann Music Group, which in turn has become a part of the international media conglomerate Sony Music.

Sony Masterworks America record label

Sony Music Masterworks is a record label, the result of a restructuring of Sony Music's classical music division. Before the acquisition of Bertelsmann's shares in the former Sony BMG, the label was known as Sony BMG Masterworks.

The Echo Label was a record label started by Chrysalis Group in 1994, and linked with Pony Canyon in Japan. The Chrysalis Group were the original owners of Chrysalis Records, which they sold to EMI.

Zomba Group of Companies record label

The Zomba Group of Companies was a music group and division which was owned by and operated under Sony Music Entertainment. The division was renamed to Jive Label Group in 2009 and was placed under the RCA/Jive Label Group umbrella. In 2011, the RCA/Jive Label Group was split in half. Multiple Jive Label Group artists were moved to Epic Records while others stayed with Jive as it moved under the RCA Music Group. In October 2011 Jive Records was shut down and their artists were moved to RCA Records.

Sony Music Entertainment Japan Japanese record label

Sony Music Entertainment (Japan) Inc., often abbreviated as SMEJ or simply SME, and also known as Sony Music Japan for short, is Sony's music arm in Japan. SMEJ is directly owned by Sony Corporation and is operating independently from the United States-based Sony Music Entertainment due to its strength in the Japanese music industry. Its subsidiaries include the Japanese animation production enterprise, Aniplex, which was established in September 1995 as a joint-venture between Sony Music Entertainment Japan and Sony Pictures Entertainment Japan, but which in 2001 became a wholly owned subsidiary of Sony Music Entertainment Japan. It was prominent in the early to mid '90s producing and licensing music for animated series such as Roujin Z from acclaimed Japanese comic artist Katsuhiro Otomo and Capcom's Street Fighter animated series.

Extended Copy Protection copy protection rootkit by Sony BMG

Extended Copy Protection (XCP) is a software package developed by the British company First 4 Internet and sold as a copy protection or digital rights management (DRM) scheme for Compact Discs. It was used on some CDs distributed by Sony BMG and sparked the 2005 Sony BMG CD copy protection scandal; in that context it is also known as the Sony rootkit.

Thomas Hesse is a senior media and digital media executive and entrepreneur. He is the CEO and Co-founder of Jamm Music, a startup company to drive engagement by the most active music fans (“super-fans”) supporting artists and labels. He is also the Founder of Consonance Investments LLC, an angel/ VC fund. He was previously President of Corporate Development and New Businesses as well as Member of the Executive Board of Bertelsmann, and before that Sony Music Entertainment's President of Global Digital Business & US Sales. He also was a Senior Adviser to CVC Capital Partners.

Sony BMG copy protection rootkit scandal Sony BMG copy protection rootkit scandal

A scandal erupted in 2005 regarding Sony BMG's implementation of deceptive, illegal, and harmful copy protection measures on about 22 million CDs. When inserted into a computer, the CDs installed one of two pieces of software which provided a form of digital rights management (DRM) by modifying the operating system to interfere with CD copying. Neither program could easily be uninstalled, and they created vulnerabilities that were exploited by unrelated malware. Sony claims this was unintentional. One of the programs installed, even if the user refused its end-user license agreement (EULA), would still "phone home" with reports on the user's private listening habits; the other was not mentioned in the EULA at all, contained code from several pieces of copylefted free software in an apparent infringement of copyright, and configured the operating system to hide the software's existence, leading to both programs being classified as rootkits.

RCA/Jive Label Group

RCA/Jive Label Group was a short-lived American record label group, owned by Sony Music Entertainment and representing the merger of the RCA Music Group and Jive Label Group. The umbrella group was formed in 2007 under the name BMG Label Group, was rebranded as RCA/Jive Label Group in 2009. In July 2011 it was finally dissolved into two separate labels: the RCA Music Group and Epic Records which took Jive subsidiaries until October 2011 when it retired Jive Records along with Arista Records and J Records. The artists on those three labels were moved to RCA Records.

RCA Music Group was an umbrella group of labels distributed by Sony Music Entertainment that existed between March 2004 and 2009, and for a short period of time between July 2011 and October 2011 as all RCA Music Group labels were merged with RCA Records.

RCA Inspiration is a gospel music group operating under Sony Music.

References

  1. Thiel, Simon (August 5, 2008). "Sony Buys Bertelsmann Sony BMG Stake for $1.2 Billion". Bloomberg L.P. Retrieved August 5, 2008.
  2. "Sony and BMG have number for Parlophone". nypost.com. January 7, 2013.
  3. "INTL: BMG Appoints Distribution And Marketing Partners For Sanctuary And Mute Catalogues". bmg.com. June 25, 2013.
  4. Archived January 11, 2006, at the Wayback Machine
  5. "Current Activity | US-CERT". Us-cert.gov. Retrieved June 22, 2014.
  6. Jeffrey, Don (September 11, 2012). "Minnesota Song Downloader Must Pay $222,000, Court Says". Bloomberg L.P. Retrieved August 9, 2016.
  7. "Sony sued for collecting data on children under 13 – San Jose Mercury News". Mercurynews.com. Retrieved June 22, 2014.