Audio Video News

Four major labels dominate the recording industry and Sony BMG has been one of them. But until now, Sony has controlled only half of the company. The other half was owned by Germany's Bertelsmann, which brought the historic RCA Records catalogue to the party, among other things. Well, Sony is buying Bertelsmann's 50 percent stake in the company, giving it total control of what will now become known as Sony Music Entertainment.

So what's half of a major record company worth in these P2P-riddled days? Sony will pay its former partner $600 million for the latter's share of the catalogue. Bertelsmann will also collect another $300 million in cash from the formerly combined company's balance sheet, bringing the total payout to $900 million. This is "substantially less than Bertelsmann ... had hoped it would command," according to The New York Times. Bertelsmann's heart had been set on something more like $1.6 billion.

The deal doesn't quite cover the entire Sony BMG catalogue. Bertelsmann will also walk away with what the Associated Press describes as "a limited amount of selected European music catalog assets" worth less than one percent of Sony BMG's 2007 revenue. But Sony is still the proud new owner of the combined output of Columbia and Epic, the two catalogues that originally put it into the recording biz, along with Arista, J Records, Jive, RCA, and Zomba. Sony artists include Alicia Keys, Avril Lavigne, Bruce Springsteen, Justin Timberlake, and Usher.