updated 09:10 am EDT, Tue August 5, 2008
Sony BMG Now Sony Music
Sony today announced that it has bought out Bertelsmann's 50 percent stake in Sony BMG and will now completely own its music label. The new label, named Sony Music Entertainment Inc. (SMEI), ends the short four-year run of Sony BMG and will let Sony create a "total entertainment experience" where the electronics giant can more closely integrate its music with its devices, according to company chief Sir Howard Stringer.
The executive doesn't provide more specific details as to company plans, though the company's most directly related products are its Walkman portable digital players, which have had to rely on third-party stores for online music since Sony Connect was shuttered last year. The company also produces many digital-aware stereos and receivers and also supports music through the PlayStation 3, which can not only play music directly but also stream it across a local network.
Bertelsmann is less specific about its plans but says the agreement is the result of a "strategic decision" that allows it to focus on business areas it knows are growing. The Germany-based company will continue to be involved in the music business and will own a handful of former Sony BMG European music titles as well as share manufacturing and distribution.
The move alludes to difficulties in the music industry, which has seen rapidly falling CD sales that have only been partly compensated for by a similar spike in online music purchases.