Campaign: Sony/BMG merger gets the green light - Financial PR

Campaign: BMG merger with Sony

Client: Bertelsmann

PR Team: Finsbury

Timescale: February-August 2004

Budget: Undisclosed

For a number of years, the big music companies have suffered from falling profits. In a bid to address the trend, Bertelsmann's music division BMG attempted to merge with Sony Music Entertainment. The first two efforts failed to gain clearance from the European Commission and the US Federal Trade Commission because of competition issues, particularly around price collusion.

In its third attempt, Bertelsmann hired Finsbury to handle financial PR in the face of highly vocal opposition to a deal that would reduce the number of major music companies from five to four. It would also create the world's second-largest record group with more than 22 per cent of the global market.

Objectives

To consult with key analysts and engage the leading financial and trade journalists across the UK, France, Spain, Germany and the US. To deflect competition concerns about price collusion, explain the damaging impact of music piracy and promote the benefits that the proposed joint venture music company would offer consumers.

Strategy and Plan

The merger faced opposition from a range of organisations, particularly the Independent Music Companies Association, which argued that the deal would squeeze out independent labels and threaten the careers of aspiring artists.

Finsbury conducted a pan-European campaign, devised in London, across its offices in France, Germany and Spain targeting financial and media journalists and analysts. The agency liaised with its public affairs arm FIPRA, which lobbied out of London and Brussels.

Finsbury, which argued the music industry landscape had changed, promoted two key messages. These were that piracy and big retailers had hit profits, while a merger would cut costs and enable more cash to be pumped into developing artists.

Key titles targeted in the UK were the broadsheets, particularly The Times, the Financial Times and The Guardian, along with trade magazines Music Week and Billboard.

The PR team focused on reaching key opinion formers and media commentators who would influence the ongoing regulatory debate at the European Commission and US Federal Trade Commission. Over the course of the regulatory process, it rolled out a pan-European programme to deliver tailored messages to each national market that established the benefits of the merger for the industry and for consumers.

Measurement and Evaluation Evaluation was conducted in-house. News and feature stories appeared in all national papers, including the FT and the other titles targeted by the PR team.

International titles that covered the story included The Wall Street Journal, New York Times, Washington Post, Les Echos, La Tribune, Das Handelsblatt and Financial Times Deutschland.

Results

The European and US Commissions both cleared the Sony/BMG merger in July.

The Times business journalist Nic Hopkins, who covered the story, says the agency was helpful, 'although I mainly went straight to Bertelsmann in-house press officers in Germany and New York'.

He adds: 'Finsbury did at times come through with some useful information - particularly its knowledge of what was going on at the EC.'

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