Sony BMG’s Future May Be As Uncertain As Music Business’ Future
Even though a Sony BMG representative hinted that the company may reissue its back catalog on vinyl over the weekend, the fate of the company itself seems unclear. Billboard reports that Bertlesmann CFO Thomas Rabe and CEO Hartmuth Ostrowski were heard murmuring about whether or not they’d continue in their joint venture with Sony once the deal is up next year:
On the same query over the future for the Sony BMG alliance, Ostrowski chimed in with a handful of scenarios. “We might take over 100%, or sell our 50% to Sony so that they have 100% or we might continue the joint venture,” he said. “All three outcomes are possible.”
Bertelsmann and Sony’s five-year retention period for the joint venture is due to expire in the summer of next year. “However, that doesn’t mean that we then have to really do anything. Instead, it has to be decided by a partner. In the meantime, we will continue to develop our business jointly,” says Rabe.
“We have good relations with our partner Sony and consensus on the strategy, and we see in our business a significant option value, particularly in the development of new digital business models,” Rabe added. … The market for physical media showed a 17% decline, which was “only partially offset” by 40% growth in digital formats, the company admits. Digital sales accounted for 17% of total revenues during the period.
Bertelsmann Execs Undecided On Sony BMG Fate [Billboard]