Sony BMG Music Entertainment is the second largest of the "Big Three" record companies in the world. Holding the No. 2 spot, it falls behind the Universal Music Group (UMG) and is ahead of the Warner Music Group (WMG). Sony Music Entertainment (SME) is a Japanese-owned American record label conglomerate that is owned and incorporated by Sony. It is a wholly-owned subsidiary of the Sony Corporation of America.
How Sony BMG Music Entertainment Was Formed
Known in the trade simply as Sony, the company was started in 1929. For the first nine years, it was called the American Record Company and maintained that title until it acquired the Columbia Broadcasting System in 1938. At that time it renamed itself the Columbia Recording Corporation.
The Sony name came into being in 1988 when the Sony Corporation bought the Columbia Recording Corporation and fittingly renamed the new entity Sony. Sixteen years later, in 2004, Sony and the Bertelsmann Music Group joined hands and established a 50-50 joint venture and became officially known as the Bertelsmann Music Group. However, four short years later, in 2008, Sony decided to grow the business and made the move to acquire Bertelsmann's stake. The new company was renamed the Sony Music Entertainment.
A Buyout Creates a Music Behemoth
The Sony buyout proved to be a strategically-sound move because it allowed Sony to acquire all of BMG's significant labels, including the former Columbia Pictures subsidiary Arista Records and Epic Records.
Today, Sony Music has a stable of eclectic labels including country labels Arista Nashville, Columbia Nashville, and RCA Records Nashville; Latin label Sony Music Latin; Christian/gospel labels Provident Label Group and Verity Records, and classical label Sony Masterworks.
The Payola Scandal
It's impossible to look at the history and status of SME without noting Sony's highly publicized payola scandal. In June 2005 SME was forced to pay an estimated $10 million in fines after being found guilty of engaging in payola by the state of New York, under New York's then-Attorney General Eliot Spitzer. The label group had been the subject of a yearlong investigation that revealed it was paying and providing expensive gifts—otherwise known as "payola"—to radio stations and their employees in return for airplay. This is in direct violation of state and federal law. The bulk of the charges surrounded payment for playing Jessica Simpson tracks.
The payola also took the form of outright bribes as well as fictitious contest giveaways, supposedly to listeners, that actually went to station employees. The Epic division of SME was singled out, in particular, for running fake contests to cover up their payola. It was determined that DJs were the only ones who ever won prizes in the contests being held.
In February 2016, in a 24-hour period, 100,000 people signed an online petition calling for a boycott of Sony Music and all other Sony-affiliated businesses after rape allegations against music producer Dr. Luke were made by musical artist Kesha. Kesha asked a New York Supreme Court to free her from her contract with Sony Music. Although the court denied the request, a highly negative public relations campaign ensued.
A Look at the Sony BMG Labels
Under the huge umbrella of Sony BMG, more than 20 labels are owned and distributed by the corporation. Sony BMG labels include some of the biggest names in the business, including the following:
- Zomba Music Group (including Rough Trade and Pinnacle)
- SoSo Def
- J Records
- Red Music Distribution
Sony BMG also has distribution and partial ownership deals with five indie labels, including the following:
Sony BMG Artists
As you might imagine of a company that is responsible for 25 percent of all music sales, Sony BMG represents some of the biggest names in music. Some of the company's top-selling artists include:
Other featured artists include Carrie Underwood, Ke$ha, Kenny Chesney, Meghan Trainor, G-Eazy, Miranda Lambert, and Willie Nelson. The label also handled the "king" of rock and roll Elvis Presley, Michael Jackson, Prince, and Jimi Hendrix.
Headquartered in New York City, Sony BMG employs over 168,000 workers across the globe and has offices in more than 30 countries worldwide. In March 2018 Sony began producing vinyl records in-house for the first time since ceasing their production in 1989. In April 2018 Sony Music's total global revenue hit the $4 billion mark.