UMG tops the charts
Bertelsmann Music Publishing (BMG), a division of German media giant Bertelsmann, has apparently been snapped up by Universal Music Group (UMG), owned by Vivendi. There are still antitrust considerations, but UMG seems to have outbid both Time-Warner Music and Viacom as well as private equity bidders for the publisher, whose value lies in the ownership of large amounts of copyrighted material. (BMG's recording division was fused with Sony Music in 2004 to make Sony BMG, though that deal is under review.)
UMG has announced it will pay $2.1 billion to enhance its already #1 position as recording company by becoming also it the #1 music publisher, with over a quarter of the market. BMG owns the rights to music by such performers as Christina Aguilera, Coldplay, the Beach Boys, and Barry Manilow. Publishers license the use of songs for other media (such as TV and movies) and for radio play.
The allure of music publishing is explained in a Financial Times article ("Universal agrees to pay €1.63bn for BMG", 9/5/06).
Music publishing was long considered the unglamorous part of the music business. It consists of collecting small royalties when songs are played in films, television programmes, advertisements and other outlets. Yet its steady revenues have become highly coveted at a time when the broader music industry is facing upheaval as it tries to adapt to new forms of digital distribution and a wave of piracy.
