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SONY BMG MUSIC ENTERTAINMENT was a record music company , which was a 50–50 joint venture between the Sony
Sony
Corporation of America and Bertelsmann AG . The venture's successor, the again-active Sony
Sony
Music Entertainment , is 100% owned by the Sony
Sony
Corporation of America .

CONTENTS

* 1 History

* 2 Controversies

* 2.1 2005

* 2.1.1 July * 2.1.2 October and November

* 2.2 2007 * 2.3 2008

* 3 See also * 4 References * 5 External links

HISTORY

Sony
Sony
BMG Music Entertainment began in Skem as the result of a 50–50 joint venture between Sony
Sony
Music Entertainment (part of Sony
Sony
) and Bertelsmann Music Group (part of Bertelsmann ) completed on March 4, 2004. It is one of the Big Four music companies, and includes ownership and distribution of recording labels such as Arista Records , Columbia Records , Epic Records , J Records , Mchenry Records, Jive Records , RCA Victor Records
RCA Victor Records
, RCA Records , Legacy Recordings , Sonic Wave America , and others. The merger affected all Sony
Sony
Music and Bertelsmann Music Group companies worldwide except for Japan, where it was felt that it would reduce competition in that country's music industry significantly.

Financial analysts covering the merger anticipated that up to 2,000 jobs would be cut as a result, saving Sony
Sony
BMG approximately $ 350 million annually.

The company's chief executive officer (CEO) is Rolf Schmidt-Holtz , who succeeded Andrew Lack on February 10, 2006. In the first half of 2005, the company's share of new releases in the United States
United States
(US) declined from 33% to 26% according to Nielsen SoundScan . This, and Lack's negotiation of what some called an "ill-conceived" deal with Bruce Springsteen
Bruce Springsteen
led to Bertelsmann informing Sony
Sony
that it would not renew Lack's contract.

The company signed a content deal with the popular video sharing community YouTube.

On August 5, 2008 Sony
Sony
Corporation agreed to buy Bertelsmann AG's 50 percent stake in the music company for $1.2 billion to get full control. The music company was renamed Sony
Sony
Music Entertainment and became a unit of Sony
Sony
Corporation of America. This allowed Sony
Sony
the rights to artists on the current and historic BMG roster and allowed Sony
Sony
Corporation to better integrate its functions with its PlayStation
PlayStation
3 and upcoming new media initiatives.

CONTROVERSIES

2005

July

Sony
Sony
BMG was fined 10 million dollars after the New York Attorney General 's office determined that they had been practicing payola mostly in the form of direct payments to radio stations and bribes to disc jockeys to promote various artists including Franz Ferdinand , Audioslave , and mainly Jessica Simpson .

Epic Records , one of their labels, was specifically cited for using fake contests in order to hide the fact that the gifts were going to disc jockeys rather than listeners.

October And November

Main article: Sony
Sony
BMG CD copy prevention scandal

A scandal ensued over digital rights management (DRM) software produced and shipped by Sony
Sony
BMG that automatically installed itself on people's computers and made them more vulnerable to computer viruses . The scandal and attendant controversy about the practice of software auto-installation spawned several lawsuits. Sony
Sony
BMG eventually recalled all of the affected CDs.

November 16 – US-CERT , the United States
United States
Computer Emergency Readiness Team, part of the United States
United States
Department of Homeland Security , issued an advisory on Extended Copy Protection DRM, citing the XCP use of rootkit technology to hide certain files from the computer user as a security threat to computer users, saying that a Sony-provided uninstallation option also introduced computer system vulnerabilities.

US-CERT advised, "Do not install software from sources that you do not expect to contain software, such as an audio CD." In its "Top Flops of '05" issue, the enterprise newsweekly eWeek had to create a new category for the " Sony
Sony
BMG root-kit fiasco." Peter Coffee, of eWeek Labs reported, "The Sony
Sony
brand name was already in trouble—it lost 16 percent of its value between 2004 and 2005....

Now it has taken a blow among tech-product opinion leaders. "We've never done it before, and we hope we'll never have occasion to do it again but, for 2005, eWeek Labs awards a Stupid Tech Trick grand prize to Sony." eWeek Vol. 22, No.50

2007

See also: Capitol Records, Inc. v. Thomas-Rasset

In October 2007, Sony
Sony
BMG, alongside other large music firms, successfully sued Jammie Thomas . Ms. Thomas – who made US$36,000 a year – was ordered to pay US$222,000 in damages for making 24 songs available for download on the Kazaa file-sharing network. Thomas had allegedly shared 1702 files in total; the court upholding the award called it an "aggravated case of willful infringement".

2008

The Federal Trade Commission sued Sony
Sony
BMG for collecting and displaying personal data of 30,000 minors without parental consent via its websites since 2004, violating the Federal Trade Commission Act and the Children\'s Online Privacy Protection Act . Sony
Sony
did not restrict minor children's participation in its websites. Sony
Sony
paid a $1 million fine.

SEE ALSO

* Companies portal

* Sony
Sony
Music Entertainment * Bertelsmann Music Group * Big Four * Sony
Sony
Music Entertainment Japan , which was not part of Sony
Sony
BMG, distributed Japanese Music in the US through Columbia or Epic, since around March 2007 when previous distributor, Tofu Records , was closed down * List of record labels * List of Sony
Sony
Music Entertainment labels * List of Sony
Sony
Music Entertainment artists * Columbia House

REFERENCES

* ^ Thiel, Simon (August 5, 2008). " Sony
Sony
Buys Bertelsmann Sony
Sony
BMG Stake for $1.2 Billion". Bloomberg L.P.
Bloomberg L.P.
Retrieved 2008-08-05. * ^ Archived January 11, 2006, at the Wayback Machine . * ^ "Current Activity US-CERT". Us-cert.gov. Retrieved 2014-06-22. * ^ Jeffrey, Don (11 September 2012). "Minnesota Song Downloader Must Pay $222,000, Court Says". _Bloomberg L.P_. Retrieved 9 August 2016. * ^ " Sony
Sony
sued for collecting data on children under 13 – San Jose Mercury News". Mercurynews.com. Retrieved 2014-06-22.

WORKS CITED

* Leonard, Devin (November 28, 2005). "Music Lessons." _Fortune _, pp. 31–32.

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