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Sony confirms labels and publishing will come together in one business unit

By | Published on Thursday 18 July 2019

Sony Music Group

Sony yesterday announced that it would more closely align its global record company and its global music publishing business under the banner of the Sony Music Group, which will be headed up by the CEO of the former, Rob Stringer.

The move has long been expected. Sony has always been unusual, compared to the other major music rights companies, in having its two music divisions operate pretty autonomously from each other. That was in no small part because, for years, the songs business, Sony/ATV Music Publishing, had a different ownership structure, with Michael Jackson controlling 50% of the company’s shares.

Then, even after Sony/ATV bought the Jackson estate out of the business in 2016, there remained complexities around the ownership of its EMI Music Publishing division, which Sony acquired as part of a consortium of investors in 2012. But last year Sony secured full ownership of all the EMI catalogues as well.

There was also the dilemma of who would be put in charge if Sony Music and Sony/ATV were brought together in one unit, with both the record company and the publishing firm being run by prominent and respected industry veterans, ie Rob Stringer and Marty Bandier respectively. The latter’s decision to step down from Sony/ATV earlier this year provided the perfect opportunity to instigate the closer integration.

In a memo to staff yesterday, overall Sony Corp chief Kenichiro Yoshida confirmed that Stringer would head up the Sony Music Group while continuing to be CEO of Sony Music Entertainment. Bandier’s replacement at Sony/ATV, Jon Platt, will now report into Stringer.

Yoshida said that the move “would further strengthen and solidify Sony’s position as a leader in the music industry” and help “foster a higher level of collaboration between our recorded music and music publishing businesses, while respecting and maintaining the independence and unique culture of each organisation”.

The shift does pose some interesting questions, especially in relation to criticisms made by songwriter groups when Sony took full control of the EMI publishing business last year.

With the shift to streaming, there has been much debate about how digital income should be shared between recording rights and publishing rights. Some argue that the original streaming business model provided too big a share of the money for the labels and artists, to the detriment of the publishers and songwriters.

Cynics point out that this suits the big music companies with interests in both recordings and songs, because industry conventions mean that labels get to keep the majority of the money they collect when recordings are exploited, whereas on the publishing side the majority of any income is paid over to the writer.

In the context of the EMI deal, some argued that by removing other investors from the EMI songs business, the bias of the Sony parent company towards recordings over songs could have more effect.

Though, actually, you could argue that the re-slicing of the digital pie that has actually occurred in the last decade – with publishers seeing their share of streaming income rise a few percent as labels take a similar cut – was in no small part achieved because of pressure from Sony/ATV and Bandier. But Sony/ATV was possibly able to be more proactive in this domain because it was more removed from the Sony labels business.

Sony, of course, would certainly deny that the corporate restructure will have any impact on Sony/ATV’s mission to secure the best possible rates for its writers. And given the big battle in that domain at the moment is against the streaming services before the US Copyright Royalty Board, rather than against the labels, it’s unlikely there’ll be any noticeable shift in the short term. But it will be interesting to see how the joined-up Sony music company’s position on things like the digital pie debate evolves in the years ahead.

Despite the unification of its global music companies, Sony’s music operations in home country Japan will still remain separate. Though Yoshida did add that “I would like for the new Sony Music Group and Sony Music Entertainment Japan to continue and further strengthen their collaboration in the spirit of One Sony”. Yeah, good luck with that.