Sony buys out Bertelsmann’s stake in Sony BMG

Beyonce and Justin Timberlake(Updates earlier post to clarify deal terms)

After four years of recriminations and in-fighting between executives from Sony Music and executives from BMG Music Entertainment, Tokyo-based Sony Corp has decided to end the mutual pain of a controversial merger and take full control of Sony BMG.

Artists like Beyonce, Bruce Springsteen and Justin Timberlake will now record under a new banner: Sony Music Entertainment Inc.

The FT had reported in June that Bertelsmann was looking for $1.2 billion-$1.5 billion for its 50 percent stake in Sony BMG, but it looks like the German media company settled for $600 million-$900 million — the exact sum depends on how you do the math.

Basically, Sony said it is paying $600 million cash to Bertelsmann, which will also get half of another $600 million in cash on Sony BMG’s balance sheet for a grand total of $900 million. The deal values Sony BMG at $1.2 billion. (UPDATE: You can argue that half of Sony BMG’s cash belonged to Sony, so its total cost was $900 million but Sony says it hadn’t consolidated Sony BMG’s cash. Bertelsmann adds that the value to it was higher than $1.2 billion, after taking into account tax breaks)

Will full ownership by Sony give the record label a new lease on life? According to Music & Copyright research, Sony BMG ranks second in the music industry with a 20.1 percent market share, behind Universal Music’s 28.8 percent. Here’s what some analysts told our correspondents in Tokyo and London:

Wii can jam too!

It was Nintendo’s turn to play a little music. Following on the heels of popular music genre games like Rock Band and Guitar Hero, Nintendo showed off Wii Music at its E3 press conference.  Here’s a quick video — shot by our video games reporter Kemp Powers — of Nintendo executives, including legendary game designer Shigeru Miyamoto , playing the Mario theme song. (Hint: Miyamoto is the short Japanese man.)

The reception for the game was mixed.  The game does let you simulate more than 60 different instruments and it does seem easy to use. However, no one keeps score and you can’t play out of tune because the game picks-up motions to play the melody. The complaint seems to be that it is too basic and simple. (To be fair, many people said that about the Wii when it came out.)

One of my colleagues may have said it best. Guitar Hero and Rock Band makes you feel like a rock star. This game makes you look like you are in a high school marching band.

MySpace Music: What the experts think.

myspace_music-primary_logo-black.jpg Was it any coincidence that Apple decided to trumpet its victory as the biggest U.S. retailer of music on the same day the world’s biggest social network declared its intentions to provide an alternative?

Who knows? What’s certain is Apple now faces another in a growing legion of competitors aiming to chip away at its dominance.

Here’s what the experts think:

James McQuivey, analyst at Forrester Research:
“A MySpace music store is exactly the right step to get the music industry to the next level because it recognizes that consumers don’t just buy music, they experience it, which is a much larger concept — they share, they discover, they heckle, they even use it to provide self-identify. That’s what people do with music already on MySpace, it’s what has made Last.FM and so popular so quickly. But none of those experiences take it to the next level, allowing consumer to integrate buying music and related things. ”

MySpace Music almost a Wrap

beyonce.jpgWatch out Steve! MySpace is days away from unveiling a site that actually may give Apple’s  iTunes some competition in the digital music space.
Sources familiar with the matter tell Reuters that a joint venture between MySpace and at least three major music companies offering music streaming, MP3 downloads, concert tickets, ringtones and merchandise is just days away.
Sony BMG Music, Universal Music Group and Warner Music will have a stake in the venture they hope will take a bite out of Apple’s grip on their industry. It’s unclear if EMI Group, the fourth-largest music label, will be involved.
The labels have been talking for weeks with News Corp’s MySpace, but a 2006 copyright lawsuit by market leader Universal against MySpace has been a sticking point. Imagine a music company suing over copyright! One source said that suit could be settled in time for the announcement.
It’s not clear when MySpace Music would be launched.
All the companies either declined to comment or were not immediately available.
Long singing the blues over Apple’s strong-armed pricing tactics, some big labels have refused to sign long-term deals with iTunes, now the No. 2 music retailer in the U.S.
Will MySpace Music hit a chord with Steve Jobs, who may finally need to change his tune to sweeten the pot for the record companies?

I spent $100 mln and all I got was this lousy Bono t-shirt

U2The Live Nation touring and merchandising agreement with supergroup U2 could be worth $100 million estimates one Wall Street analyst.

Live Nation, a tour promoter that is evolving rapidly into an all-round music company, has prepped a 12-year deal with supergroup U2 which includes its merchandising, digital, image licensing in addition to its touring but hasn’t revealed how much money will change hands (not to us anyway).

However David Joyce, media analyst at Miller Tabak, ventures that the deal will be in the $100 million range. Joyce, who likes Live Nation’s prospects, has based his guesstimate on the $120 million figure that Live Nation is widely believed to have agreed with Madonna in cash and stock last year.