On Music Row: Behind Sony’s BMG buyout

Monday, August 11, 2008 at 2:18am
Gibson will host five job fairs to help fill its 200 new positions.

Sony Corp. plans to buy Bertelsmann AG's half of its joint venture Sony BMG and rename the company Sony Music Entertainment Inc. The buyout, which is worth about $1.2 billion, is subject to regulatory approval.

Sony BMG was formed four years ago as a joint venture that was scheduled to expire in August of next year. Bertelsmann now plans to focus BMG on music rights management and establish a licensing and management platform.

The most obvious benefit of Sony's sole ownership is the greater opportunity for cross-marketing opportunities between its recording artists and its consumer electronic products, specifically Sony Ericsson mobile phones.

Other probable tie-ins include providing music for Sony’s video games — which include Madden NFL ’09 — and television shows like King of Queens and The Young And The Restless.

The company already has been pushing sales of movies and TV shows through its television sets and PlayStation 3 gaming system. Last month, Sony Pictures offered its film Hancock exclusively via an Internet-enabled Sony Bravia television prior to DVD distribution.

Another plus for Sony is that it will no longer have to agree with another company on its strategy, freeing it up to increase cost-cutting measures.

And let’s not forget the value of Sony’s powerhouse artist roster.

In Nashville, labels under the Sony umbrella are home to superstars Kenny Chesney, Brooks & Dunn, Carrie Underwood, Jessica Simpson, Martina McBride, Alan Jackson and numerous others.

The company can also claim mainstream stars including Bruce Springsteen, Justin Timberlake, Celine Dion, and Alicia Keys.

Wipperman named president of Equity

Tim Wipperman has been named president of the Equity Music Group after serving as the label's chief creative officer since 2004. He assumes the role from exiting GM and Interim President Derek Simon, who will leave the label Aug. 16 in pursuit of new opportunities.

"Since Tim joined our team in 2004, Equity has been blessed with amazing talent," noted Clint Black, co-founder of the label, which is home to Carolina Rain, Kevin Fowler, Laura Bryna and Blake Wise. "His creative touch and respect within the music community has enabled the label to attract some amazing talent and unique opportunities."

Wipperman previously spent almost three decades as the head of Warner Bros. Music publishing (now Warner/Chappell Music). Under his 29 years of leadership, the company won more than 500 ASCAP and BMI Awards, multiple Grammys, CMA and ACM Awards and several times was named the ASCAP, BMI or Billboard Country Publisher of the Year.

Gibson adding 200 jobs

Gibson Guitar plans to immediately increase its general labor and manufacturing employee base by about 200 people, due in part to a rising demand for its musical instruments.

The company will hold five job fairs this month at the Gibson USA Plant on Massman Drive off Elm Hill Pike.

"We are excited at the growth of Gibson USA and the opportunity this brings to many experienced Nashville-based candidates who will have the opportunity to join our company," said Chairman and CEO Henry Juszkiewicz. "We continue to innovate and expand and with that comes the need to hire enthusiastic team members who can share in our success."

Disc Makers buys CD Baby

Disc Makers, a leading CD and DVD manufacturer for independent artists and filmmakers, has acquired independent music seller CD Baby, following a seven-year strategic partnership between the two companies. CD Baby will continue to operate as a separate company, focused on online CD sales, distribution and download sales.

CD Baby enables independent musicians to sell their music in both physical and digital format through its online store. Since opening, it has paid musicians more than $81 million for CD and download sales.

According to a press release, the Oregon-based company is the largest seller of independent music in the country and its online music store receives over 100,000 visitors each day. With more than 2 million digitized tracks under management, CD Baby is also the largest provider of independent music for iTunes and other digital download sellers like Amazon MP3, Napster and Rhapsody.

Warner’s Q3 shows smaller loss

Warner Music Group’s recently released fiscal third-quarter report showed a narrowed net loss and increased revenue. The net loss shrank by 47 percent to $9 million while sales grew 5.5 percent to $848 million, but fell slightly on a constant-currency basis.

Domestic revenue fell 6.5 percent, while international revenue increased 17 percent, or 3.6 percent on a constant-currency basis.

Recorded music revenue rose 5.1 percent from the prior-year quarter to $686 million and was down 1.0 percent on a constant-currency basis. Major sellers in the quarter included titles from Madonna, Disturbed, Plies, Luis Miguel and Frank Sinatra.

Revenue from digital sales totaled $156 million, up 39 percent, and represented almost 23 percent of total recorded music revenue. Music publishing revenue rose 7 percent from the prior-year quarter to $168 million.

© 2008 — Music Row Communications

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