Rudi Gassner and the Executive Committee of BMG International
BMG International is a subsidiary of Bertelsmann AG, a German media conglomerate that became the second largest media enterprise with 1992 sales of $9.7 billion. At that time Bertelsmann was comprised of over 200 companies and 50,000 employees in 37 countries whose business interests included music, radio, television, film, book, magazine and newspaper publishing and distribution, printing and manufacturing operations. Headquarted in a small rural German town called Guetersloh, the company did not enter the US market until 1986 through the purchase of several companies, one of which was RCA Records, a label that had put its name on the map in the 1950's through one artist: Elvis Presley. The acquisition of RCA elevated Bertelsmann Music Group (BMG) into the ranks of the "Big Six" record companies. The other five companies CBS, Warner, PolyGram, MCA, Capitol-EMI and BMG were responsible for supplying 80% of worldwide music sales at that time.
Rudi Gassner became CEO of BMG International in 1987. At that time the company operated in 17 countries with headquarters in New York. Gassner described the organization as "a patchwork of companies around the world. It had no mission, no goals, and in total, it didn't make any money..." (p 369) Due to the lack of structure, Gassner was able to build his idea of what a global company should look like, and he wasted no time in getting started. The structure he created for BMG was a centralized corporate structure and decentralized local management structure emphasizing a flat hierarchal form. He established this in creating five regional divisions led by regional directors (RD's) who were responsible for the strategic development of the region in conjunction with the whole company, in addition to managing the managing directors (MD's). This structure tackled two crucial business issues: globalization and domestic repertoire. After he created the regional structure, Gassner established an executive committee consisting of the regional directors and four members that were corporate staff. At the end of the case, the executive committee was having trouble reaching a consensus about some major issues.
Rudi Gassner is credited with expanding BMG's overseas presence from 17 countries to 37 in his first six years. He accomplished this by forming joint ventures, purchasing small labels, and launching new satellite companies. With Gassner leading the company, annual sales increased at an average of 20%, hitting $2 billion in 1993, accounting for two-thirds of BMG's overall revenue that year.
With all the fame and fortune now, Drake now owns his own record label titled October’s Very Own(OVO). According to Theculturetrip.com It was started back in 2012 when he wanted to craft a definitive Toronto sound. Under the direction of Warner Brothers Production, October’s Very Own is set for world domination, encompassing all types of music.
The two biggest components are major and independent record labels. Major record labels are the driving force of the industry, “Big Four labels/major record labels represented the majority of the music sold, making up as much as 75% of the music market or more depending on the year.” (About.com) Additionally, “The five major record labels; Sony, Universal, BMG, EMI and Time Warner dominate 85% of the market when it comes to sales of Compact Discs. Leaving only 15% for the hundreds of independent record labels and thousands of artists out there." (Raprehab and Bomhiphop.com) In his essay A Brief Outline of How the International Popular Music Industry Manipulates and Exploits the Audience, Shams Quader discusses this issue."Big Four is responsible for 70% of the worldwide music and 85% of US music sales. ... Seeing that these companies have such a monopolistic hold on the world market..." (Quader) it would be safe to presume that the music monopoly was/ is created as a result of how the three major record labels today are holding more than three forths of the net profit of the industry moreover the question of the monopoly was brought to the table especially when Universal Music Group proposed a merger with EMI and many of its top billboard chart artists, Universal Music Group was also the
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Using this data as well as their reported numbers, we can make a reasonable estimation on the size of each of their global regions. We know that there was a net increase of $2M between 2013 and 2014 based on their revenue report. We also know that their Asian/Pacific market had 5% growth, their North American market had 6.3% growth and their Latin America market had 3.3% growth. Their EMEA region suffered a .8% loss.
However, during the 1990s, Philips and Matsushita both faced major challenges to sustain their position in the market. Changing profile of the industry and globalization forces made Philips and Matsushita’s organizational models and competitive advantages obsolete, and brought up the need for drastic actions. At the brink of a new century, the battle of two giants unraveled with CEOs from both sides implementing another round of strategic initiatives and restructurings. The pressure put on new CEOs was enormous – wrong st...
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The three major record labels are Sony Music Entertainment, Universal Music Group, and Warner Music Group; these majors have sub-labels such Atlantic Records (Warner) and Columbia Records (Sony). There are thousands of indie labels (300 Entertainment, Mad Decent, etc.) yet they only represented about a third of the total US album market share in 2015. Majors have substantial amounts of capital at their disposal and key divisions in-house (distribution, publishing), often putting them at an advantage over their smaller competitors. The below graph shows just how large a share of the US recorded music market the major labels controlled in 2015 compared to their many independent