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New York/ Gütersloh (pte044/12.05.2003/14:34) - AOL Time Warner http://www.aoltimewarner.com and Bertelsmann http://www.bertelsmann.de are currently discussing a merging of the two music branches of the media companies. A fusion of the labels Warner Music Group and BMG would make it the second largest music company behind the market leader Universal Music. Due to the current crisis in the music business, a final decision, however, is still to be made, reports the Wall Street Journal (WSJ).
The goal of the merger is to unite two music companies but still allow them a fifty-fifty partnership. Still to be determined is how much each of the labels is worth, and also who will control the new label. Warner Music has a more lucrative catalogue of older songs than BMG, thus making it difficult to bring both firms onto the same level. The market value of each company, however, is about the same. In the USA, both are worth about 16 per cent.
Warner Music head Roger Ames is more experienced in the music business than BMG chief Rolf Schmidt Holtz. It is still unclear as to whether Bertelsmann is prepared to give up control of its management to another company.
In general, the music business is suffering. In previous years talks about the fusion of music labels was a seldom occurrence, but since the revolution in the internet and digitalisation has halted the flow of sales, even the larger companies are now struggling to stay afloat.
Warner Music Group also owns Warner Bros and the labels Atlantic Records, Electra and Maverick. The Labels Arista, J Records, Zomba and RCA belong to BMG.
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