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overview
This profile considers Polygram, Philips, Siemens, Telefunken
and Decca.
It covers -
AEG,
Philips and Siemens are profiled on the following page.
 PPI
and Polygram
Netherlands
electronics group Philips, discussed on the following
page of this profile, expanded into the record business
during 1924 when it established a recording studio after
acquiring radio manufacturer Nederlandsche Seintoestellen
Fabriek. It began record manufacturing in 1933 and in
1942 acquired Hollandsche Decca Distributie (HDD), the
Decca licensee, gramphone manufacturer and independent
record label. HDD had been founded in 1931 and expanded
within Europe and the Dutch empire (eg Java).
In
1950, following Columbia's introduction of the long playing
record, Philips consolidated its international recording
interests as Philips Phonografische Industrie (PPI). A
year later it entered an alliance with Columbia: PPI became
Columbia's distributor outside the US, Columbia became
PPI's distributor within the US.
In
1960 PPI acquired Mercury Records in the US, amid growing
tension with Columbia. Mercury had been founded 1945 by
Irving Green (1916-2006), Berle Adams and Arthur Talmadge.
In 1961 Columbia ended the alliance, establishing its
own European distribution network. Philips acquired Italy's
Melodica labels and established the GPG joint venture
with Siemens in 1962, selling 50% of PPI to Siemens. It
introduced the compact cassette in 1963.
PPI,
in search of economies of scale, acquired Chappell Music
Publishing in 1968. GPI was replaced by Polygram (which
absorbed the record interests of Philips and Siemens)
in 1972. Polygram acquired the Verve label from MGM,
United Distribution Corporation, the Robert Stigwood Organization
and stakes in Casablanca and Barclay records. In 1979
it acquired Decca and London Records. A merger between
Polygram and Warner Music was forbidden by both the US
Federal Trade Commission and Germany's cartel office in
1983. Philips thereupon acquired 40% of Polygram from
Siemens, buying the remaining shares in 1987. In that
year it rationalised its film operations, with closure
of Polygram Pictures, and sold Chappell Music to Warner.
Two
years later, it sold 16% of Polygram in a deal that valued
the record group at US$5 billion. A further 9% was sold
in 1993. Polygram had meanwhile been aggressively acquiring
major and minor labels in Europe and North America - notably
A&M Records - and music publishing and film interests.
Purchases for example included Interscope, Abbey Home
Entertainment, Gramercy Pictures and Kitty Music.
In
1998, as part of large-scale restructuring at Philips
amid speculation that the group would collapse, Polygram
was sold to Seagram
for US$10 billion. Seagram bundled Polygram with Motown
and other record interests as Universal Music Group. Two
years later Seagram was acquired by Vivendi
for US$34 billion, becoming Vivendi Universal.
DG
and Telefunken
The
Deutsche Grammophon Gesellschaft (DG) was founded in 1898
by Emile Berliner, a German-born United States citizen,
as the German branch of his Berliner Gramophone Company
(later The Gramophone Company). DG was initially based
in Hannover but later moved to Berlin, cross-licencing
with UK predecessors of HMV and
with the Victor Talking Machine Company (later part of
RCA). Like most competitors
it produced both records and phonographs.
Its links with the Gramophone Company were loosened by
expropriation in 1917 as part of the 1914-18 War. DG emerged
as an independent organisation, facing increased competition
from local labels such as Odeon and from Anglo-American
imports and subsidiaries. The Gramophone Company's German
factory, for example, opened in 1929 and manufactured
some 2 million records by the end of 1930. In 1935 DG
aligned itself with Decca, becoming that group's licensee
in Germany and much of Central Europe.
DG was acquired by the Siemens & Halske electrical
group (discussed on the following page of this profile)
in 1941. Siemens sold its stake in Telefunken at that
time. Revival after the war saw an emphasis on classical
music but difficulty with distribution outside Europe.
Siemens accordingly formed the Gramophon-Philips Group
(GPG) joint venture with Netherlands based Philips in
1962, following the end of the alliance between PPI and
Columbia. Philips
took a 50% stake in DG. Siemens acquired 50% of DG.
In
1972 GPG was replaced by Polygram, 50% owned by Siemens
and holding that group's former stake in DG.
Telefunken
was established as a joint venture of Siemens and AEG
in 1903, initially for radio transmitter and receiver
production. In 1929 it licensed (and in 1932 acquired)
the Ultraphon label; during the following decade it partnered
with IG Farben in development of magnetic tape recording
(building on expertise from the turn of the century in
wire-based recording).
In
1941 Siemens sold off its stake in Telefunken, with AEG
taking control and establishing Telefunken-Schalplatte
as the vehicle for its record operations. (Parent Telefunken
continued to produce consumer hi-fi equipment, microphones
and other electronics gear.) In 1969 the ailing AEG merged
with Telefunken as AEG-Telefunken, being acquired by the
Daimler-Benz auto group - then on an acquisition spree
that culminated in purchase of Deutsche Aerospace and
Chrysler in 1998. Rationalisation of Daimler's AEG arm
saw closure, sale or spin-off of most of its consumer
operations. Telefunken's recording operations were acquired
by Decca and now centre on the Teldec label.
Decca
The
Decca records group was founded in the UK by Edward Lewis
during 1929, initially expanding overseas through licensees.
The 'Decca' trade name appears to have been first used
in 1914 for a portable gramophone manufactured by Barnett
Samuel & Sons Ltd, acquired by Lewis in 1934.
H.W. van Zoelen for example became the Decca distributor
in The Netherlands in 1929 and formed Hollandsche Decca
Distributie (HDD) in 1931 as the exclusive Decca distributor
for Netherlands and its colonies, while
Deutsche Gramophon became Decca's German licensee in 1935.
In
1952 Decca acquired the Universal
International film group. It sold Universal to MCA in
1962. It was acquired by Polygram in 1969.
studies
Studies
of Philips, Siemens and AEG are highlighted on the following
page. This site features a more detailed bibliographic
essay on the music industry.
Context is provided by The Global Jukebox: The International
Music Industry (London: Routledge 1996) by Robert
Burnett, An International History of the Recording
Industry (London: Cassell 1998) by Pekka Gronow &
Ilpo Saunio, Timothy Day's A Century of Recorded Music:
Listening to Musical History (New Haven: Yale Uni
Press 2000) and James Nott's Music for the People
(Oxford: Oxford Uni Press 2002).
For
Polygram see in particular Gerben Bakker's 2003 The Making
of a Music Multinational: The International Strategy of
Polygram, 1945-1998 (PDF)
and the paper
by Marc Huygens, Charles Baden-Fuller, Frans Volberda
& Henk Van Den Bosch on Co-evolution of firm capabilities
and industry competition: Investigating the music industry,
1877-1997. Geoffrey Jones 1985 Business History
Review article on 'The Gramophone Company: An Anglo-American
Multinational, 1898-1931' is also of interest.
 next
page (Philips, Siemens and AEG)
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