History of Sony Music Entertainment

History of Sony Music Entertainment

In 1929 American Record Company, the company that would later become Sony Music Entertainment was founded and then acquired by Columbia Broadcasting Company (CBS) in 1938. In March 1968, Sony began joint venture with the American Company CBS to form CBS/Sony Records Inc. September 1976, Sony introduced the optical digital audio disc (CD). In January 1988, CBS Records Inc was absorbed by Sony and in January 1991, the new company was renamed Sony Music Entertainment Inc (SME).

In August 2004, Sony BMG Music Entertainment was established as a new joint venture with Bertelsmann AG and in August 2008, Sony acquired BMG’s 50% stake in SME and began operation once again as SME, a wholly owned subsidiary of Sony Corporation. In July 2012, Sony/ATV Music Publisher a joint venture between Sony and the Michael Jackson Family Trust, along with a consortium of other investment firms, bought the publishing arm of EMI Group, which made Sony as the world’s largest music publisher.

Assignment Questions no. 1 :

Describe the music industry and the trends leading up to the present competitive environment in the industry.

There are 3 main parts of music industry : Live, Publishing and Recorded. They have changed dramatically over 150 year life.

Before the 1900s – music and entertainment had a strong emphasis on live performance.

In 1993 – MP3 algorithm enabled the reduction of song files to a size that made internet broadcasting and uploading and downloading feasible.

In 1994 – WXYC (89.3 FM, Chapel Hill, North Carolina) became the first traditional radio to announce broadcasting on the Internet.

In 1998 – the new found portability of music was coupled with a naming service and comprehensive databases of music information developed by Gracenote. These technologies opened the floodgates of digital distribution.

In 1999 – following the technologies, Napster the illegal file sharing service was started.

Beginning of 20th century – music began to become ownership driven. Artists began to produce recording of their music. Recording has made music industry more efficient, because artists were able to reach a wider audience with their songs. And also this means more time for artists to be spent on creating new music.

In 2000s copyright infringement has a huge increase. In music industry the duplicates were identical in quality and costless. Also sharing music was so easy through Napster/ Limewire/ Kazaa. Those things makes matters worse for the profitability of the industry.

As of May 2014 two bills were under consideration by the U.S congress. The Stop Online Piracy Act (SOPA) and The Protect IP Act (PIPA). These Act has been protested because the bills was considerate will have undermined the free and open exchange of information online. As the Institute for Policy Innovation estimated that “global music piracy causes $12.5bio of economic losses every year, 71.060 U.S jobs lost, a loss of $2.7bio in workers’ earnings, and a loss of $422mio in tax revenues, $291mio in personal income tax and $131mio in lost corporate income and production taxes”