Bertelsmann, Sony To Merge Music Companies

Music giants Sony and Bertelsmann are planning on merging their BMG and Sony Music labels into a joint venture. According to an internal e-mail from Bertelsmann chief executive Gunter Thielen, leaked to the news agency Reuters on Thursday, the companies have signed a memo of understanding that will lead to the creation of a new label, Sony BMG, with ownership split 50-50 by both companies. The deal, which must still be approved by competition authorities, would create a new company controlling 25.9 percent of the world's music market, at the same time bringing artists ranging from BMG's Britney Spears and Pink and Sony's Michael Jackson and Beyoncé Knowles under one roof. The deal is part of a greater trend of consolidation in the music industry, which has suffered from falling revenue in recent years.