Bertelsmann Loses Less On Music

Bertelsmann’s only remaining music business interest is costing the German media giant less money, as its joint-venture with Sony Corp has reported that it’s $30 million better off compared with the same stage last year.

Sony-BMG lost $8 million in the second fiscal quarter that ended September 30, a huge drop on the $39 million it dropped during Q2 2006.

Even that was an improvement on the $60 million downside it had for the same period in 2005, although the decline of the physical music market has caused revenues over the last two years to fall from $936 million to $851.

The European Commission’s decision to stick with its 2004 ruling that the Sony-BMG merger be allowed to proceed without remedies, although likely to provoke an appeal from the indies, may make the partners more confident of going ahead with further cost-cutting measures.

Although the sale of its publishing business to Universal – another deal under EU scrutiny – left a half-share in Sony-BMG as Bertelsmann’s sole music asset, an early October report in Financial Times Deutschland suggested the Gütersloh-based company will return to publishing.

Citing people familiar with the plans, the paper said the company will re-enter the business once it has sat out the time frame established as one of the conditions of that deal.

It said the appeal of music publishing to Bertelsmann managers is that it generates a more stable revenue stream than recorded music.