{{short description|Former American record company}} {{Multiple issues| {{Update|date=June 2014}} {{More citations needed|date=June 2014}} }} {{Use mdy dates|date=December 2014}} {{Infobox company | name = Sony BMG Music Entertainment | logo = 200px|class=skin-invert | type = Joint venture | fate = Bertelsmann's stakes sold by Sony, brand reused by Bertelsmann itself as BMG Rights Management | predecessors = {{ubl|Sony Music Entertainment, Inc.|Bertelsmann Music Group}} | successors = Sony Music Entertainment {{small|(current incarnation without using "Inc.")}}<br/>BMG Rights Management {{small|(spin-off)}} | founded = {{start date and age|2004|8|6}} | hq_location_city = New York City | hq_location_country = U.S. | hq_location = <!--modifies "Headquarters" entry--> | num_locations = <!--# of locations--> | area_served = Worldwide | defunct = {{start date and age|2008|10|1}} | key_people = {{ubl|David Gordon (chairman, Sound & Vision)|Thomas Rabe}} | industry = {{ubl|Music|Entertainment}} | products = Music | owners = '''Each of 50% owned by:'''<br>{{unbulleted list|Sony Corporation of America|Bertelsmann}} | website = {{url|https://web.archive.org/web/20060101212743/http://www.sonybmg.com/}} }}
'''Sony BMG Music Entertainment''' was an American record company owned as a 50–50 joint venture between Sony Corporation of America and Bertelsmann. 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 the remaining 200 artists.<ref>{{Cite web |date=2008-08-05 |title=Sony to acquire all of Sony BMG for $1.2 billion |url=https://www.nbcnews.com/id/wbna26035292 |access-date=2025-09-18 |website=NBC News |language=en}}</ref><ref>{{Cite web |date=2008-10-02 |title=Sony Acquires Bertelsmann's 50 Percent Stake In Sony BMG; Drops BMG From Name - CBS News |url=https://www.cbsnews.com/news/sony-acquires-bertelsmanns-50-percent-stake-in-sony-bmg-drops-bmg-from-name/ |access-date=2025-09-18 |website=www.cbsnews.com |language=en-US}}</ref>
==History== Sony BMG Music Entertainment began as the result of a merger between Sony Music (part of Sony) and Bertelsmann Music Group (part of Bertelsmann) completed on August 6, 2004. It was 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.
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 (CEO) was 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.
The company signed a content deal with the popular video sharing community YouTube{{Citation needed|date=December 2023}}.
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.<ref name="bloombergjapan">{{cite web |url=https://www.bloomberg.com/apps/news?pid=20601101&sid=awvLxyBlODc4&refer=japan |title=Sony Buys Bertelsmann Sony BMG Stake for $1.2 Billion |access-date=2008-08-05 |last=Thiel |first=Simon |date=August 5, 2008 |publisher=Bloomberg L.P. |archive-date=October 9, 2007 |archive-url=https://web.archive.org/web/20071009122448/http://www.bloomberg.com/apps/news?pid=20601101 |url-status=live }}</ref> 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.
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.<ref>{{cite web|url=https://nypost.com/2013/01/07/sony-and-bmg-have-number-for-parlophone|title=Sony and BMG have number for Parlophone|date=January 7, 2013|website=nypost.com|access-date=December 20, 2017|archive-date=September 23, 2017|archive-url=https://web.archive.org/web/20170923052504/http://nypost.com/2013/01/07/sony-and-bmg-have-number-for-parlophone/|url-status=live}}</ref> 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.<ref>{{cite web|url=https://www.bmg.com/de/news/intl-bmg-appoints-distribution-and-marketing-partners-for-sanctuary-and-mute-catalogues.html|title=INTL: BMG Appoints Distribution And Marketing Partners For Sanctuary And Mute Catalogues|date=June 25, 2013|website=bmg.com|access-date=September 22, 2017|archive-date=September 23, 2017|archive-url=https://web.archive.org/web/20170923003147/https://www.bmg.com/de/news/intl-bmg-appoints-distribution-and-marketing-partners-for-sanctuary-and-mute-catalogues.html|url-status=live}}</ref>
==Controversies==
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.<ref>{{cite web |url=http://www.oag.state.ny.us/press/2005/jul/jul25a_05.html |archive-url=https://web.archive.org/web/20060111051244/http://www.oag.state.ny.us/press/2005/jul/jul25a_05.html |url-status=dead |title=SONY SETTLES PAYOLA INVESTIGATION |archive-date=January 11, 2006 }}</ref>
===Rootkit scandal=== {{Main|Sony BMG copy protection 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."<ref>{{cite web |url=http://www.us-cert.gov/current/current_activity.html#xcpdrm |title=Current Activity | US-CERT |publisher=Us-cert.gov |access-date=2014-06-22 |archive-date=February 29, 2012 |archive-url=https://web.archive.org/web/20120229022359/http://www.us-cert.gov/current/current_activity.html#xcpdrm |url-status=live }}</ref> 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=== {{See also|Capitol Records, Inc. v. Thomas-Rasset}} 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".<ref>{{cite news|last1=Jeffrey|first1=Don|title=Minnesota Song Downloader Must Pay $222,000, Court Says|url=https://www.bloomberg.com/news/articles/2012-09-11/minnesota-song-downloader-must-pay-222-000-court-says|access-date=9 August 2016|work=Bloomberg L.P.|date=11 September 2012|archive-date=January 23, 2018|archive-url=https://web.archive.org/web/20180123000619/https://www.bloomberg.com/news/articles/2012-09-11/minnesota-song-downloader-must-pay-222-000-court-says|url-status=live}}</ref>
===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.<ref>{{cite web |url=http://www.mercurynews.com/business/ci_11190787?source=rss |title=Sony sued for collecting data on children under 13 – San Jose Mercury News |work=Mercurynews.com |date=December 10, 2008 |access-date=2014-06-22 |archive-date=March 3, 2016 |archive-url=https://web.archive.org/web/20160303233659/http://www.mercurynews.com/business/ci_11190787?source=rss |url-status=live }}</ref>
==See also== {{Portal|Companies}} * Sony Music Entertainment * Bertelsmann Music Group * Big Four * Sony Music Entertainment Japan, which was not part of Sony BMG, distributed Japanese Music in the US through Columbia or Epic, since around March 2007 when previous distributor, Tofu Records, was closed down * List of record labels * List of Sony BMG Entertainment artists * List of Sony Music Entertainment labels * List of Sony Music Entertainment artists * Columbia House
==References== {{Reflist}} *Leonard, Devin (November 28, 2005). "Music Lessons." ''Fortune'', pp. 31–32.
==External links== <!-- * [http://www.sonybmg.com/ SonyBMG.com] - now redirects to [http://www.sonymusic.com/ Sony Music Entertainment] --> * [http://www.sonycmg.com/ Sony Commercial Music Group (CMG)] – Official Site * [http://biz.yahoo.com/ic/135/135429.html Sony Music Entertainment, Incorporated – Company Profile] on Yahoo! * [http://www.stereophile.com/news/080904sonybmg/ Music Press Coverage of Sony BMG Merger Completion] * [http://quote.bloomberg.com/apps/news?pid=10000100&sid=aJA8.MzOgEP4 Business press coverage of merger completion] * {{usurped|1=[https://web.archive.org/web/20100505003913/http://www.groklaw.net/staticpages/index.php?page=20051122010323323 Groklaw Page on Sony BMG DRM Issues and Litigation]}} * [https://www.eff.org/cases/sony-bmg-litigation-info Sony BMG Litigation and Rootkit Info] * [http://www.zeropaid.com/news/9362/Sony+BMG+Sued+for+Software+Piracy+-+Assets+Seized/ Sony BMG Sued for Software Piracy – Assets Seized] {{Webarchive|url=https://web.archive.org/web/20090319074225/http://www.zeropaid.com/news/9362/Sony+BMG+Sued+for+Software+Piracy+-+Assets+Seized |date=March 19, 2009 }} * {{YouTube|user=sonybmg}}
{{Sony Corp}} {{Bertelsmann}} {{Music industry}}
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{{DEFAULTSORT:Sony Bmg}} Category:Sony BMG Category:2004 establishments in New York City Category:2008 disestablishments in New York (state) Category:American record labels Category:Former Bertelsmann subsidiaries Category:Defunct companies based in New York City Category:Defunct record labels of the United States Category:Record label distributors Category:Record labels disestablished in 2008 Category:Record labels established in 2004 Category:Recording Industry Association of America Category:Multi-channel networks Category:Sony Music