Strategic Alliances, Collaboration and Joint Ventures Case Study

Sony-BMG Joint Venture: Lessons from a Dis-jointed Venture

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Abstract:
Sony and BMG Music Entertainment, the second-largest music record company in the world, was formed as a 50:50 joint venture between Sony Music and Bertelsmann Music Group in August 2004, with both the companies having equal representation in its board. Soon, the company's sales declined and Michael Smellie, Sony and BMG's chief operating officer from Bertelsmann, tendered his resignation. Following this, the Bertelsmann group opposed the renewal of contract for Andrew Lack, who was from Sony and was the CEO of the joint venture, on the grounds that he was responsible for the lackluster performance of the company.

Pedagogical Objectives:

• To discuss the ongoing consolidation in the global music industry
• To discuss the reasons that led to the Sony-BMG joint venture
• To discuss the opposition of the Bertelsmann group to the renewal of the contract for Andrew Lack to remain CEO of the joint venture.

Keywords : Sony BMG;Mergers,Acquisitions,Alliances Case Study; Sony Music; Bertelsmann Music Group; Global music industry; On-line music piracy; Internet and file swapping technology; Joint venture; Synergies of a merger; Pay for play scandal; Andrew Lack; Restructuring strategies; Executive tension; Personality clashes; Sony BMG labels; Costs cutting strategies

Contents : 
Sony& BMG Music Entertainment: The Formation and Troubles
Sony BMG Music Entertainment
Surviving the Odds
Lessons from a Disjointed Venture
Sony Music and BMG Labels Worldwide