Bertelsmann Music Group

Bertelsmann Music Group
Division
IndustryMusic
FateAssets sold to Sony Corporation of America
SuccessorBMG Rights Management
Founded1987; 31 years ago (1987)
Defunct1 October 2008 (2008-10-01)
HeadquartersNew York City, New York, U.S.
ParentBertelsmann
Websitewww.bmg.com

Bertelsmann Music Group (abbreviated as BMG) was a division of German media company Bertelsmann before its completion of sale of the majority of its assets to Japan's 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 unit and Bertlesmann'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 (since August 2004) the 50% share of the joint venture with Sony Music Entertainment, which established the German American Sony BMG Music Entertainment (Sony BMG) from 2004 to 2008.

Acquisition

The joint venture with Sony Music was set up in August 2004. It reduced the Big Five record companies to the Big Four record companies. At that time, the company had a 21.5% share in the global music market. Sony Music and BMG remained separate in Japan, although BMG Music Japan was wholly owned by Sony BMG.

On 27 March 2006, the New York Times reported that Bertelsmann was looking to raise money by leveraging some of its media assets, and that executives from both companies were in talks about possibly altering the current venture. Bertelsmann sold its 50% share of Sony BMG to Sony Corporation of America for a total of $1.5 billion, and the company was renamed back to Sony Music Entertainment Inc.

While officially withdrawing from the business of recorded music, Bertelsmann continued its strong presence in other areas of the music industry by establishing BMG Rights Management, which specializes in music rights management and by representing artists and authors. It is focused mainly in BMG's European stronghold markets. The basis of the company was formed through BMG's decision to withhold selected European music catalogues from the former Sony BMG joint venture and the BMG Publishing businesses.

Also kept separate from the acquisition by Sony Corporation of America was Sony BMG's wholly owned and operated BMG Japan. Sony Music Japan remained independent from the Sony BMG joint venture, therefore BMG and Sony labelling were kept separate in Japan under the venture. During Sony BMG's buyout, BMG Japan was instead picked up by Sony Music Entertainment Japan. It briefly continued to operate as a distinct entity until a reorganization in early 2009 folded the company into Sony Music Japan.