SonyBMG is reportedly in talks with its parent companies about moving into the music publishing domain, even though that would put them in competition with another Sony company.
SonyBMG was created, of course, through the 2004 merger of Sony Corp and Bertelsmann's recorded music businesses - but the merger did not include the two media congloms' respective music publishing outfits, Sony/ATV and BMG Music Publishing.
The fact that the merged entity wasn't trading in the increasingly profitable music publishing sector no doubt helped persuade European Commission competition regulators to approve the merger, both in 2004 and when they reinvestigated the impact of the merger this year - a reinvestigation which reported last week, of course.
But while the lack of publishing assets may have helped SonyBMG avoid being split up by competition regulators forced to reconsider the original merger, it also puts the major at a disadvantage moving forward given that all three of its major competitors also own successful publishing businesses - which is useful for those competitors given that the publishing sector is not struggling in the same way as the recorded music sector.
SonyBMG's Sony Corp parent does own a successful publishing company, of course, in Sony/ATV, its joint venture with Michael Jackson, which is expanding under the leadership of recently appointed CEO Marty Bandier. Meanwhile, and as much previously reported, other parent Bertelsmann sold its publishing company to Universal Music, and they are currently barred from proactively trading in the publishing space by conditions of that sale, although they are known to be already considering new ventures in the sector as soon as those conditions come to an end.
Meanwhile, according to the Financial Times, SonyBMG chief Rolf Schmidt-Holtz has said he is "really close" to having agreement from both Sony and Bertelsmann to let him start to dabble in the publishing space. The FT quote him thus: "The shareholders are talking at the moment and I'm confident we will find a solution".
It is likely SonyBMG would begin by entering into publishing contracts with singer songwriters who are already signed to them as recording artists - ie by looking for so called 360 degree deals with its artists that give the major a share in revenue streams other than recordings in return for the appropriate investment. The FT reports that Schmidt-Holtz argues that SonyBMG will have to be in a position to enter into such deals because that is what artists will increasingly demand, adding: "I have a lot of artists who are also songwriters, and I have to keep them in my company". He also adds that by moving into publishing through such deals he won't end up "competing with my shareholder [ie Sony/ATV] for major catalogues".