Sony, Bertelsmann merging to form worlds largest music label

November 9, 2003

Quakester2000 andGristyMcFisty used our news submit to tell us the Register is reporting that Sony and Bertelsmann may well
soon be able to merge their two music operations. With the result being a new, very large, music label. Leaving Universal in the dust. Each partner has a 50 percent stake in the new joint venture, dubbed Sony BMG. All that they lack now is a blessing from US, European and other nations' regulatory authorities.

Precise terms of the merger - if it goes ahead - were not disclosed. However, both participants said the arrangement would not include their respective music publishing, distribution and manufacturing operations.

If the deal goes through, it will take the JV's global market share to 26 per cent - just ahead of the current market leader, Universal, which current has around 24 per cent of the market.

Sony and BMG have been in merger talks for some time. Right now, EMI and Time Warner are also discussing bringing their two music businesses together. If their talks go the way of Sony and BMG's, and they too gain regulatory approval, then the world will end up with three major labels and an almost perfect four-way split between them and the collected independent labels, which together account for around 25 per cent of the world music market.

It seems lately that we are living in a world of business implosions. Obvious cost cutting measures to remain competitive. Every year there are less and less companies out there.

Source: theregister.com