Sony is preparing a major advertising campaign designed to promote its new Sony Connect digital download service, while employees at BMG and Sony's music labels prepare for mass redundancies.
BMG and Sony won permission to merge from European and US regulators, despite strong opposition from many parties, concerned the move would give the combined labels an inordinately strong market position.
Sony/BMG is now offering voluntary severance packages - early retirement and voluntary severance. Digital Music News reports these offers as a: "Chance to feel out soft tissue prior to making substantial personnel changes."
Benefits available are described as "maybe" better than those that will be available when company accountants finally wield the involuntary severance knife. The label is also cutting artists.
Macy Gray gets free Walkman
Sony's new ad campaign features singer Macy Gray, who is seen "strutting with the new Network Walkman Digital Music Player to her cover of Aerosmith's "Walk This Way," according to AdWeek.
The campaign will "encompass more than 24 products" that relate to Sony's Connect service. "This is critically important, because we're not just launching one hard-drive product, but relaunching the Walkman line," said Mark Viken, senior vice president of corporate marketing at Sony Electronics.
The campaign runs until February with "over ten" TV, radio, Internet and print campaigns planned.
Sony's plans to use its brands
In a move that shows how major companies with fingers in many pies can utilise their cross-branding power to stimulate or affect a market, the report also reveals that: "A focus on brand placements through Sony Pictures," is planned.
"The Walkman products will get a very aggressive campaign using the total power of Sony, from its [label] artists to its movie studio", the report reveals.
Apple and the Association of Independent Music had complained that a merger between Sony and BMG would negatively affect the market. Apple was concerned that digital-music distribution competitor Sony Connect would unfairly benefit from the merger, thus stifling competition.
The European Commission had originally agreed, warning that the move would "limit consumer choice and reinforce alleged anti-competitive behaviour among the main music companies", adding, "it will significantly enhance a situation of collective dominance in which the majors try to align their pricing policies".
Europe's independent label representatives warned: "A merger would disproportionately aggravate collective dominance, making it significantly easier for large players to continue to abuse their market power by manipulating access to music at retail, media, and on the Internet, thereby raising the barriers to access for the other market participants."
Despite such objections, Europe's Competition regulators agreed to the merger.