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As widely reported, Sony bought out BMG and now owns 100% of what used to be Columbia and RCA back 
in the days. The Wall Street Journal reported a few interesting things. The whole shebang was valued 
at $1.8 billion, which is a remarkably low market cap for a large chunk of the world's commercial 
recorded legacy. BMG got a relatively small payment and got to keep the joint venture's cash on the 
books, half of which they owned already anyway. WSJ reports Sony's strategy is to once again try to 
use software (ie music) to try and sell hardware (music playing gear or "synergies" with video gear 
or whatever. Given their terrible track record with this strategy, it will be interesting see where 
this goes. But, on the plus side, Sony has a record of tolerating low profits and losses in its 
movie unit in order to sell DVD players, large-screen TV's professional video gear, etc. It also was 
able to leverage its movie studio as a big muscle in the Blu-Ray victory. Also on the plus side, 
perhaps, I've read several reports that Sony is looking anew at SACD and may try the format once 
again. For classical fans, there may be a downside but I've heard nothing factual on this. The RCA 
Living Stereo SACD reissues were a pet project, reportedly, of the family that controls BMG. Indeed, 
owning the Living Stereo catalog was said to be a factor in BMG's decision to purchase RCA's music 
business. Another downside is that under the joint-venture, the reissue programs were stalled or 
gutted and indeed first RCA's studio complex and then Sony's shut down. I'm not clear if there is a 
unified library/archive for this company, or if part or all of that has been outsourced. One friend 
of mine described Sony as "the bizarro Apple, never able to hit the mark in recent years." 
Stockholders have been restless and it will be interesting to see how much pressure the company 
comes under to wring profits out of the music business. Sony, being a technology company, may be 
positioned well to transition away from manufactured CD's into a download-centric world, but bizarro 
has been their MO with everything from digital music players to an online store -- they don't seem 
to get any of this. There are also frequently rumors floating around about Sony and Apple, although 
nothing has ever come of any of that.

One interesting trend is that if music-owning entities continue to shed value and market cap, the 
day will come where the content (ie the archives and the active contracts) will be attractive to a 
Microsoft, Google or Apple. Under such a scenario, I doubt the buyer company would stay in the 
manufactured-CD business for most titles and would probably be net-savvy enough to "get it" and 
succeed at online sales, if they bought the catalog at a low enough price. I would say 
value-bleeding would need to continue apace a few years before this becomes viable, although a 
cash-rich company like Google could overpay to take a gamble sooner. CD sales will soon be 50% of 
the peak years.

-- Tom Fine