Sony and BMG to Merge Music Units Into Joint Venture (1 Viewer)

[Lee Scoggins]

http://online.wsj.com/public/us

I will try to find more details as additional stories cross the wire.

 

[Lee Scoggins]

Here are some more details:

http://www.nypost.com/business/10084.htm

 

[Lee Scoggins]

Time Warner is trying to sell its music assets to pay down debt, and if Time Warner CEO Dick Parsons believes he has little chance to get regulatory approval for an EMI deal, he could move toward selling the division to a private equity group headed by Edgar Bronfman Jr.

Very interesting....

And if Warner/EMI combine in some fashion (or try to depending on regulators) do we see the Beatles catalog on DVDA?

Then you have two big SACD parties and 2 big DVDA parties? and Universal on the fence with both?

lots of interesting possibilities...

 

[David Coleman]

Yes this will be interesting to see how this shakes out in the DVDA and SACD releases??

 

[Rachael B]

This, ultimately, is bad news. It's bad enough having 5 huge sloth-like companies dominating the music business, the spectre of having that power concentrated to fewer companies is bad for consumers, IMO. Regulators may take the same stance? Maybe not given the present adminestration?

 

[Lee Scoggins]

It's bad enough having 5 huge sloth-like companies dominating the music business, the spectre of having that power concentrated to fewer companies is bad for consumers, IMO.

You may very well be right, but it appears that no one's music division was making money and maybe the combination will ensure a better (at least financially) business model for music.

I thought about something else this morning:

Maybe this merger helps hirez by creating bigger support of both formats...? For instance, music alliances may add to profitability by rationalizing distribution lines and that may help free investment cash for hirez....also maybe a bigger company focusing on hirez titles leads to a more focused marketing effort and effort to do bigger name albums-ie. more clout for talking to artists/groups like the Beatles.

Just some food for thought...

 

[Lee Scoggins]

Some more details from Bloomberg:

http://quote.bloomberg.com/apps/news...7lFmk&refer=us

Interesting market share numbers at the bottom. Universal remains at #1 even after the merger.

Speculation that any Warner - EMI alliance will be scuttled due to regulation.

 

[Michael_T]

Interesting market share numbers at the bottom. Universal remains at #1 even after the merger.

Not necessarily. Those numbers are for 2001 and 2002.

If you add the 2002 market share numbers, worldwide, for SONY and BMG, you get a number that is slightly larger than Universal's worldwide market share alone.

In the domestic US, it would seem that Universal may still hold on to the #1 share.

 

[Lee Scoggins]

I was looking at the North America numbers.

But if you add BMG and Sony on a worldwide basis, you still have Universal at #1. 25.2 for BMG/Sony versus 25.9 for Universal.

 

[Peter Kline]

There's a non-binding agreement to do so. But there's possible problems ahead. Every time big companies merge the Federal Government looks into the ramifications.
This is not necessarily good news for consumers. Independent record labels have always been the mainstay of innovation for the past 40 years. Giant monopolies controlling music tends to limit creativity, keep prices high and foster less choices. We'll see.

 

[Lee Scoggins]

Here is some info on BMG:

Artists (Selection)

Christina Aguilera, Backstreet Boys, Patrick Bruel, Busta Rhymes, The Calling, Nick Carter, The Chieftains, Kenny Chesney, Dave Matthews Band, Dido, Foo Fighters, Whitney Houston, Alan Jackson, Jars of Clay, R. Kelly, Alicia Keys, Avril Lavigne, Annie Lennox, *NSYNC, Kazumasa Oda, Pink, Elvis Presley, Eros Ramazzotti, Santana, Michael W. Smith, Britney Spears, Rod Stewart, Third Day, Justin Timberlake, TLC, Diego Torres, Usher, Luther Vandross, Westlife

Companies (Selection)

Arista Records (New York), Arista Associated Labels (New York), BMG Ariola (Munich), BMG Canada (Toronto), BMG Classics, BMG Distribution (New York), BMG Japan (Tokyo), BMG Music Publishing (New York), BMG Ricordi (Milan), BMG Songs (Los Angeles), BMG Special Products (New York), BMG UK & Ireland (London and Dublin), J Records (New York), Jive Records (New York), Provident Music Group (Nashville), RCA Music Group (New York), RCA Label Group - Nashville (Nashville), Verity (New York), Zomba Music Publishing (New York)

Independent record labels have always been the mainstay of innovation for the past 40 years.

That should not change with this JV. Most independents doing quality work like Chesky, Telarc, Reference/Dorian are not part of the Big 5, er 4. Also, some big music companies can preserve the small company atmosphere and A&R that leads to quality work. Witness Blue Note's recent artist hits like Norah Jones...

 

[Marc Colella]

Don't know if this will effect DVD-A or SACD in any way - at least not yet... but this isn't really something to cheer about.

This is yet another desperate measure from within the industry to try and stop the downward spiral they've been experiencing for years.

The grand scheme is what really matters, and it definitely isn't positive.

You can bet that Hi-Rez is the least of their concerns right now.

 

[Lee Scoggins]

The grand scheme is what really matters, and it definitely isn't positive.

I am not so sure. In this case, the music industry is so financially in the dog house, that improved business models from the JV may be in fact a good thing.

 

[Phil A]

The likely reasons for a joint venture are regulatory approval and also reporting financial results to stockholders. I suspect the main thing they want to do is save some resources and not have those losses on their corporate earnings. AOL Europe was a joint venture between Bertlesmann and AOL until around the beginning of January 2002. Since AOL Europe competed against European telephone companies, which more or less gave away internet access, it lost is shirt. As part of the joint venture the losses did not get reflected in AOL's earnings. Around Jan. 2, 2002, AOL's stock traded at around $31.50 share. While certainly not the only factor involved in the stocks decline, the restatement of earnings to reflect the joint venture losses did not have a positive impact. By the time the quarter closed, the stock was trading between $18-19/share.

So, in summary, this really is not about hi-rez. It is about keeping losses off of the books of BMG and Sony so the stock does better and the corporate executives can get a little more fat.

 

[Dennis Nicholls]

Christina Aguilera, Backstreet Boys, Patrick Bruel, Busta Rhymes, The Calling, Nick Carter, The Chieftains, Kenny Chesney, Dave Matthews Band, Dido, Foo Fighters, Whitney Houston, Alan Jackson, Jars of Clay, R. Kelly, Alicia Keys, Avril Lavigne, Annie Lennox, *NSYNC, Kazumasa Oda, Pink, Elvis Presley, Eros Ramazzotti, Santana, Michael W. Smith, Britney Spears, Rod Stewart, Third Day, Justin Timberlake, TLC, Diego Torres, Usher, Luther Vandross, Westlife

Nothing of interest to me personally in this list, except perhaps a Santana record or two.

 

[Danny Tse]

I still have my fingers crossed for a Samantha Fox SACD

 

[Michael_T]

I was looking at the North America numbers.

But if you add BMG and Sony on a worldwide basis, you still have Universal at #1. 25.2 for BMG/Sony versus 25.9 for Universal

DUH! You are correct. I have no idea what I was looking at. :b

I stand corrected.

 

[Lee Scoggins]

Things are heating up on the music merger front. Here is a story about renewed efforts of a private equity group to buy EMI.

http://quote.bloomberg.com/apps/news...2QIO0&refer=us

Let's hope Bronfman wins and wants to release some albums in hirez.

 

[John Kotches]

Can someone else help me out here....

Why is one company that is losing money hand over fist (BMG) looking to merge with another company's division that is showing a big loss? If I remember correctly combined losses were on the order of $200 million.

If the two seperately are losing money, on what basis can we say that merging the two is going to improve matters any?

How will this merger going to change mindsets? This is what has the large music corporations in hot water to begin with.

This holds true for both potential mergers, BMG/Sony and EMI/Warner.

Regards,

 

[John Watson]

these mega corporations are brainless borgs

the only really bad news I can imagine worse than reality is Gates being allowed to buy them all. :frowning:

Danny, that makes me