Bertelsmann Music Group
| Company type | Division of Bertelsmann |
|---|---|
| Industry | Music industry |
| Predecessor | RCA/Ariola International (established 1985) |
| Founded | 1987 |
| Fate | Majority assets transferred to Sony Corporation of America on 1 October 2008 |
| Headquarters | Germany |
| Products | Recorded music, music publishing |
| Parent | Bertelsmann (until 2008) |
Bertelsmann Music Group (BMG) functioned as a segment of the German media giant Bertelsmann until the majority of its assets were transferred to Sony Corporation of America on 1 October 2008.
Originating in 1987 under the name RCA/Ariola International (initially established in 1985), BMG merged RCA Records with Bertelsmann's Ariola Records alongside its subsidiaries, including Arista Records. The group also encompassed BMG Music Publishing, recognized as the world's third-largest and leading independent music publisher. In August 2004, BMG entered a 50% joint venture with Sony Music, resulting in the formation of Sony BMG, which remained operational until 2008.
History
In 1994, BMG broadened its portfolio through the acquisition of the Italian publishing company Casa Ricordi, founded in 1808.
By 1998, BMG divested its video game publishing arm, BMG Interactive—famous for the Grand Theft Auto franchise—to Take-Two Interactive, acquiring a 16% shareholding in Take-Two as part of the deal.
The 2004 merger between Sony and Bertelsmann consolidated their respective music divisions, reducing the Big Five record companies to the Big Four, collectively commanding a 21.5% share of the global market. Notably, Sony Music and BMG continued to operate independently within Japan; BMG Music Japan became wholly owned by Sony BMG.
Around 2006, Bertelsmann began evaluating options for capitalizing on its media holdings and reconsidering the structure of its joint venture. This culminated in 2008 when it sold its half stake in Sony BMG to Sony for $1.5 billion, after which the entity reverted to operating as Sony Music Entertainment Inc.
Following this divestiture, Bertelsmann concentrated on managing music rights via BMG Rights Management, focusing primarily on European markets by retaining selected European catalogs from both the former joint venture and its publishing division. This strategy prioritized artist advocacy and rights administration rather than producing recorded music.
During the buyout process, Sony BMG’s wholly owned subsidiary BMG Japan remained separate; it was eventually merged into Sony Music Entertainment Japan in early 2009 following corporate restructuring.
Subsidiaries
Currently under full ownership of Sony Music Entertainment after acquiring Bertelsmann’s 50% interest in Sony BMG.
- Ariola Records
- RCA Music Group
- Arista Nashville
- RCA Nashville
- BNA Records
- BMG Kidz
- Zomba Music Group
BMG Music Publishing
Excluded from the Sony BMG merger, BMG Music Publishing (previously known as RCA Music Publishing) was sold by Bertelsmann to Universal Music Group in 2007 for €1.63 billion and subsequently absorbed into Universal Music Publishing Group, leading to the retirement of the BMG brand. Headquartered at 245 Fifth Avenue, New York City, it maintained operations through 36 offices spanning 25 countries.
Artists
BMG's extensive catalog encompassed over one million copyrights and featured prominent performers such as Elvis Presley, Kylie Minogue, Christina Aguilera, Coldplay, Shania Twain, Maroon 5, and Iron Maiden. Via Zomba Music Publishing, the company controlled rights for artists including Linkin Park, Britney Spears, Justin Timberlake, Michael Jackson, among others; European rights for these artists are currently administered by Concord Music Publishing through Imagem.
The songwriters affiliated with BMG crafted chart-topping tracks for artists like Mariah Carey, Black Eyed Peas, Kenny Chesney, 50 Cent, Bob Dylan, Frank Sinatra, and additional notable names. Globally, BMG held a leading position in classical music and was recognized as the top entity in contemporary Christian music.
Catalogues owned
BMG Music Publishing represented various catalogues internationally through sub-publishing agreements involving entities such as Famous Music Publishing, Walt Disney, Roadrunner Records, Leiber & Stoller, Fremantle Media, Pete Waterman, and Malaco Records across multiple regions.
In 2006, BMG Music Publishing broadened its holdings by acquiring Complete Music. The Christian music branch of BMG—Brentwood-Benson Music Publishing—held more than 60,000 copyrights and was renamed Universal Music Brentwood-Benson following its purchase by Universal Music. Currently, this catalog is overseen by Capitol CMG Publishing under the Capitol Christian Music Group umbrella.
BMG Rights Management
Following Sony’s acquisition of Bertelsmann’s share in Sony BMG, Bertelsmann retained ownership of specific recording rights and the BMG brand name. These assets formed the basis of BMG Rights Management. Initially funded with backing from Kohlberg Kravis Roberts (KKR), it subsequently became a fully owned subsidiary of Bertelsmann. Today, it functions as a principal division within Bertelsmann and serves as the successor to the former Bertelsmann Music Group.
CD price fixing
From 1995 until 2000, several leading music corporations—including Bertelsmann Music Group—participated in unlawful marketing practices such as minimum advertised pricing agreements. These arrangements artificially raised compact disc prices to limit discount competition from retailers like Best Buy and Target.
In 2002, a settlement was reached involving Sony Music, Warner Music Group, Bertelsmann Music Group, EMI Music, and Universal Music Group. The companies consented to pay $67.4 million in penalties and distribute $75.7 million worth of CDs to public and nonprofit organizations without admitting any liability. It was estimated that consumers were overcharged by nearly $500 million in total—amounting to up to $5 extra per album.