Who Owns What???

I decided to investigate the Universal Music Group because they are the recording company behind one of my favourite groups, Rammstein.

First I believe a bit of history is called for so one can understand as to where all of this came from and how/why it is what it is today.

PolyGram was the name from 1972 of the major label recording company started by Philips as a holding company for its music interests in 1945. In 1998, it was sold to Seagram and made part of Universal Music Group

Philips Phonografische Industrie (PPI), 1950-1962

In the 1940s, the record business was spread out within Philips — research in the Eindhoven labs, development elsewhere in Eindhoven, recording in Hilversum, manufacturing in Doetinchem, distribution from Amsterdam and exports from Eindhoven. During the late 1940s, Philips combined its various music businesses into Philips Phonografische Industrie (PPI), a wholly owned subsidiary.

PPI’s early growth was based on alliances. A merger was first proposed with Decca of London in late 1945, but was rejected by Edward Lewis, Decca’s owner. (PolyGram finally acquired Decca in 1979.)

In the early 1950s, Philips set itself the goal of making PPI the largest record company in Europe.

PPI’s second attempt at a merger was with Deutsche Grammophon Gesellschaft (DGG). DGG, owned by Siemens AG and well-known for its classical repertoire, had been the German licensee for Decca from 1935. Shortly after PPI was founded it had made a formal alliance with DGG to manufacture each others’ records, coordinate releases and not to poach each others’ artists or bid against each other for new talent. PPI and DGG finally merged in 1962.

The alliance with DGG still left PPI without repertoire in Britain or the US. But in 1951, after Columbia had failed to renew its international distribution agreement with EMI, PPI agreed to distribute Columbia recordings outside the US and have Columbia distribute its recordings inside the US. This agreement ran until 1961, when Columbia set up its own European network and PPI set out to make acquisitions in the US beginning with Mercury Records in 1962.

GPG and PolyGram, 1962-1980

In 1962, PPI and DGG formed the Gramophon-Philips Group (GPG), with Philips taking a 50% share in DGG and Siemens a 50% share in PPI. In 1972 the companies formally merged to form PolyGram, of which Philips and Siemens each owned 50%. In 1977 both organisations merged operationally, integrating the recording, manufacturing, distribution and marketing into a single organisation.

GPG needed to move into the US and UK markets, and did so by a process of acquisition: Mercury/Smash/Wing (US) in 1962, RSO(UK) in 1967, MGM Records and Verve (US) in 1972, Casablanca (US) in 1977, Pickwick in 1978, and Decca (UK) in 1980. PolyGram acquired United Distribution Corporation (UDC) in 1973 and signed distribution deals with MCA and 20th Century Records in 1976.

Reorganization, 1980-1998

In 1982, Polygram purchases 20th Century Fox Records from Rupert Murdoch who had recently purchased all of 20th Century Fox, and was not interested in keeping the record company. The assets of the former 20th Century Fox Records were consolidated with the company’s Casablanca label.

After an attempted 1983 merger with Warner Music failed, Philips bought 40% of PolyGram from Siemens, and in 1987 the remaining 10%.

The compact disc, invented by Philips and Sony, helped greatly in boosting the company’s sales and market share.

In 1989, Philips floated 16% of PolyGram on the Amsterdam stock exchange, valuing the whole company at $5.6 billion. PolyGram embarked on a new program of acquisitions, including A&M and Island Records in 1989, Swedish company Polar Music which held the rights to the ABBA catalogue, Motown in 1993, Def Jam in 1994 and Rodven (Venezuela) in 1995.

In 1998, Philips sold PolyGram to Seagram and it was merged into Universal Music Group.

Universal Music Group (UMG)

Universal Music Group (UMG) is the largest business group and family of record labels in the recording industry. With a 25.5% market share, it is one of the Big Four record labels (Sony BMG, EMI, Universal and Warner). It is a wholly owned subsidiary of Vivendi; Universal Studios, the movie studio, was sold in part to NBC, which itself is part of GE.

UMG’s record labels have many of the world’s best selling artists including Def Leppard, The Killers, Mary J. Blige, Mariah Carey, Janet Jackson, Fall Out Boy, Enrique Iglesias, Bon Jovi, Queens of the Stone Age, Falco, Elton John, Eminem, Tupac Shakur, Guns N’ Roses, Dr. Dre, 50 Cent, Daddy Yankee, Don Omar, Marilyn Manson, Akon, Reba McEntire, Sheena Easton, Diana Ross,Barry White, Luciano Pavarotti, Rammstein, U2, the Black Eyed Peas,Nelly Furtado, Wu-Tang Clan, George Strait, Gwen Stefani, Maroon5, Grace Jones, The Mars Volta, Rihanna, Kanye West, Ashanti, Mims, Amy Winehouse and Fergie. UMG now owns the largest music publishing business in the world, the Universal Music Publishing Group, (after their acquisition of BMG Music Publishing in June 2007).

Vivendi’s headquarters are in Paris, France. In the United States, UMG is located in Santa Monica, California, and New York City, New York along with Universal Music Group Nashville; in the UK the group has a number of offices in London and Romford.

Statistics
US music market shares, according to Nielsen SoundScan (2005)
Nielsen SoundScan reported that the big four accounted for 81.87% of the US music market in 2005:

In 2004, 72.64%:

  • Universal Music Group — 29.59%
  • Sony BMG — 28.46% (13.26% Sony, 15.20% BMG)
  • Warner Music Group — 14.68%
  • EMI Group — 9.91%
  • Independent Labels — 27.36%
World music market sales shares, according to IFPI (2005)
The global market was estimated at $30-40 billion in 2004. Total annual unit sales (CDs, music videos, mp3s) in 2004 were 3 billion.
According to an IFPI report published in August 2005, the big four accounted for 71.7% of retail music sales:
  • Universal Music Group — 25.5%
  • Sony BMG Music Entertainment — 21.5%
  • EMI Group — 13.4%
  • Warner Music Group — 11.3%
  • independent labels — 28.4%
Prior to December 1998, the industry was dominated by the “Big Six”: Sony Music and BMG had not yet merged, and PolyGram had not yet been absorbed into Universal Music Group. After the PolyGram-Universal merger, the 1998 market shares reflected a “Big Five”, commanding 77.4% of the market, as follows, according to MEI World Report 2000:

Universal Music Group including PolyGram — 21.1%

Universal Music Group

Type

Subsidiary of Vivendi

Founded

1934 (as Decca Records USA)
1990 (MCA Music Entertainment Group formed)
1996 (first UMG incarnation)
1998 (second UMG incarnation)

Headquarters

Santa Monica, California and Broadway, New York, United States

Key people

Doug Morris: CEO
Lucian Grainge: Chairman and CEO UMG International

Industry

Music entertainment

Revenue

4.989 billion (2005)

Net income

€480 million (2005)

Parent

Vivendi

Website

http://www.universalmusic.com


History

For history prior to 1996, see MCA Records.

“Universal Music” was once the music company attached to film studio Universal Pictures. Its origins go back to the formation of the American branch of Decca Records in 1934. MCA Inc. bought American Decca in 1962. The present organization was formed when its parent company Seagram purchased PolyGram and merged it with Universal Music Group in 1998. However, the name first appeared in 1996 when MCA Music Entertainment Group was renamed Universal Music Group.

With the 2004 acquisition of Vivendi’s Vivendi Universal Entertainment by General Electric‘s NBC, Universal Music Group was separated entirely from its film studio namesake for the first time.

In February 2006, the group became 100% owned by French media conglomerate Vivendi SA when Vivendi purchased the last 20% from Matsushita, the group’s sole owner from 1990 to 1995 and co-owner from 1995 to 2006.

On September 6, 2006 it was announced that Universal Music will purchase BMG Music Publishing (to become Universal Music Publishing Group), for €1.63 billion ($2.1 billion), subject to regulatory approval.


All information found therein, courtesy of www.wikipedia.org.
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~ by Andrew on April 24, 2008.

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