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Sony BMG

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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 200 remaining artists.

Sony BMG Music Entertainment
TypeJoint venture (Delaware general partnership)
IndustryMusic and entertainment
FoundedMarch 4, 2004; 17 years ago (2004-03-04)
DefunctOctober 1, 2008; 13 years ago (2008-10-01)
FateBertelsmann's share acquired by Sony
Successors
Headquarters,
United States
Key people
David Gordon: chairman Sound & Vision
OwnersEach of 50% owned by:
Website"http://sonybmg.com/". Archived from the original on January 1, 2006.

Contents

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 March 4, 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.

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. 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. 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.

Payola fine

In July 2005, Sony BMG was fined $10 million after the New York Attorney General's office determined that they had been practicing payola mostly in the form of direct payments to radio stations and bribes to disc jockeys to promote various artists including Franz Ferdinand, Audioslave, and mainly Jessica Simpson.

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.

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." 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

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".

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.

  1. Thiel, Simon (August 5, 2008). "Sony Buys Bertelsmann Sony BMG Stake for $1.2 Billion". Bloomberg L.P. RetrievedAugust 5, 2008.
  2. "Sony and BMG have number for Parlophone". nypost.com. January 7, 2013.
  3. "INTL: BMG Appoints Distribution And Marketing Partners For Sanctuary And Mute Catalogues". bmg.com. June 25, 2013.
  4. [1] Archived January 11, 2006, at the Wayback Machine
  5. "Current Activity | US-CERT". Us-cert.gov. RetrievedJune 22, 2014.
  6. Jeffrey, Don (September 11, 2012). "Minnesota Song Downloader Must Pay $222,000, Court Says". Bloomberg L.P. RetrievedAugust 9, 2016.
  7. "Sony sued for collecting data on children under 13 – San Jose Mercury News". Mercurynews.com. December 10, 2008. RetrievedJune 22, 2014.
  • Leonard, Devin (November 28, 2005). "Music Lessons." Fortune, pp. 31–32.

Sony BMG
Sony BMG Article Talk Language Watch Edit 160 160 Redirected from SonyBMG This article has multiple issues Please help improve it or discuss these issues on the talk page Learn how and when to remove these template messages This article needs to be updated Please help update this article to reflect recent events or newly available information June 2014 This article needs additional citations for verification Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Sony BMG news newspapers books scholar JSTOR June 2014 Learn how and when to remove this template message Learn how and when to remove this template message 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 200 remaining artists Sony BMG Music EntertainmentTypeJoint venture Delaware general partnership IndustryMusic and entertainmentFoundedMarch 4 2004 17 years ago 2004 03 04 DefunctOctober 1 2008 13 years ago 2008 10 01 FateBertelsmann s share acquired by SonySuccessorsSony MusicBMG Rights ManagementHeadquartersNew York City New York United StatesKey peopleDavid Gordon chairman Sound amp VisionOwnersEach of 50 owned by BertelsmannSony Corporation of AmericaWebsite http sonybmg com Archived from the original on January 1 2006 Contents 1 History 2 Controversies 2 1 Payola fine 2 2 Rootkit scandal 2 3 Kazaa file sharing lawsuit 2 4 Children s online privacy violations 3 See also 4 References 5 External linksHistory EditSony 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 March 4 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 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 1 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 2 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 3 Controversies EditPayola fine Edit In July 2005 Sony BMG was fined 10 million after the New York Attorney General s office determined that they had been practicing payola mostly in the form of direct payments to radio stations and bribes to disc jockeys to promote various artists including Franz Ferdinand Audioslave and mainly Jessica Simpson 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 4 Rootkit scandal Edit Main article 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 5 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 Edit 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 6 Children s online privacy violations Edit 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 7 See also Edit Companies portal 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 HouseReferences Edit Thiel Simon August 5 2008 Sony Buys Bertelsmann Sony BMG Stake for 1 2 Billion Bloomberg L P Retrieved August 5 2008 Sony and BMG have number for Parlophone nypost com January 7 2013 INTL BMG Appoints Distribution And Marketing Partners For Sanctuary And Mute Catalogues bmg com June 25 2013 1 Archived January 11 2006 at the Wayback Machine Current Activity US CERT Us cert gov Retrieved June 22 2014 Jeffrey Don September 11 2012 Minnesota Song Downloader Must Pay 222 000 Court Says Bloomberg L P Retrieved August 9 2016 Sony sued for collecting data on children under 13 San Jose Mercury News Mercurynews com December 10 2008 Retrieved June 22 2014 Leonard Devin November 28 2005 Music Lessons Fortune pp 31 32 External links EditSony Commercial Music Group CMG Official Site Sony Music Entertainment Incorporated Company Profile on Yahoo Music Press Coverage of Sony BMG Merger Completion Business press coverage of merger completion Groklaw Page on Sony BMG DRM Issues and Litigation Sony BMG Litigation and Rootkit Info Sony BMG Sued for Software Piracy Assets Seized Sony BMG s channel on YouTube Retrieved from https en wikipedia org w index php title Sony BMG amp oldid 1051709722, wikipedia, wiki, book,

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