Sony BMG

Sony BMG Music Entertainment, Inc. — result of creation of joint venture 50/50 between Sony Music Entertainment (Sony affiliated enterprise) and BMG Entertainment (BMG affiliated enterprise) completed on August 5, 2004. It is one of the musical companies which is included into Big Four, and the having rights of possession and distribution of sound recording labels, such as Arista Records, Columbia Records, Epic Records, J Records, RCA Victor Records, RCA Records, Legacy Recordings, Sonic Wave America, MCI and others.

The financial analysis showed that consolidation will lead to reduction of 2000 jobs, and Sony BMG will save on it about 350 million US dollars annually.

Rolf Schmidt-Holtts released Andrew Lek from a duty of the head (CEO) on February 10, 2006. In the first half of 2005 the share of the company in the market of new products of sound recording fell to the USA from 33% to 26% (according to Nielsen SoundScan). This transaction of Lek with Bruce Springsteen called "a sick idea" led to the fact that Bertelsmann informed Sony on not prolongation of the contract with Lek. Andrew Lek holds a post of the chairman of the board of directors at present. Earlier this post was held by Rolf Schmidt-Holtts. The company signed the agreement on content with a popular on-line video resource of YouTube recently. On October 2, 2008 the Sony corporation redeemed 50% of shares from Bertelsmann AG and became the only owner of the company, having changed its name to Sony Music Entertainment Inc.

On March 27, 2006 the New York Times newspaper reported that Bertelsmann conducted negotiations with Sony concerning possible changes in joint venture. At negotiations on an occasion of fate of Sony BMG two managing directors told that Bertelsmann can suggest Sony to give the second half of joint venture, due to value increase of some media assets. Managing directors of Sony BMG are anxious also that any such agreement can come to the end only within several months. However on July 13, 2006 the European Union cancelled the positive decision of the European Commission after the request in IMPALA (trade association of independent brands of Europe) followed. This solution can be disputed by joint venture or the European Union. Meanwhile, the joint venture at the moment is again checked by the European Commission. The new solution is expected in 2007.

As it was announced by Sony BMG liquidates a label of Sony Urban Music. All related actors will be transferred to Epic or Columbia now.