Introduction
Song Music Entertainment began as of a corporate joint venture between SME and
Bertelsmann MusicGroup in August 2004. In agreement with the terms established both companies
owned 50 percent of all labels acquired beforehand. Soon afterthemerger SME and BMGSony BMG
became the largest distributor ofmusic and labelsin the world second only toUniversal “UMG”.
On August 2008 Sony Corporation of America agreed to buy Bertelsmann’s 50% stake in the
music company for $1.2 billion to $1.5 billion. The newly bought corporation wasrenamed Sony Music
EntertainmentInc.to reflect ofthe revival of SME priorto themergerin 2004.Headquartered atNew
York City,the corporation has continued to thrive as a wholly owned subsidiary of Sony Corporation of
America.
I
ExternalAnalysis
Thissection will analyze SME as a large record label company by using both the PESTEL Analysis
and the Five‐Forces Model. The PESTEL Analysis will examine the political, economic,socio‐cultural,
technological, environmental, and legal forcesimpacting thisindustry. The Five‐Forces Model will
consider how supplier power, buyer power, degree ofrivalry,threat of new entrants, and threat of
substitutes affectrecord labels.