Lis­ten: One Seg­ment

1. High­light­ing recent devel­op­ments in a field of inquiry that has been a major focal point of the FTR series, this pro­gram deals largely with gains in the on-line music field by the Ger­man Ber­tels­mann firm.

2. Much of the dis­cus­sion cen­ters on the Bertelsmann-Napster deal, in which the Ger­man media giant offered a mod­est amount of cap­i­tal, the nul­li­fi­ca­tion of lit­i­ga­tion between the com­pa­nies and a part­ner­ship between the firms to use the Peer-to-Peer (P2P) tech­nol­ogy to mar­ket music on-line. (“Online Music Rebel Nap­ster in Alliance with Ber­tels­mann” by James Hard­ing and Christo­pher Grimes; Finan­cial Times; 11/1/2000; p.1.)

3. This deal will give Bertelsmann’s BMG music divi­sion access to the largest Inter­net com­mu­nity in the world. (Idem.) The arrange­ment will also give Bertelsmann’s e-commerce divi­sion access to the P2P tech­nol­ogy that is the foun­da­tion of the Nap­ster oper­a­tional network.

4. The P2P tech­nol­ogy is seen as hav­ing far-reaching poten­tial for both mar­ket­ing and (per­haps more impor­tantly) office com­mu­ni­ca­tions. (“Ber­tels­mann Opens door to the Work­place for Napster“by Car­los Grande; Finan­cial Times; 11/2/2000; p.6)

5. As the Bertelsmann-Napster deal was tak­ing shape, the Euro­pean Com­mis­sion was rul­ing against the Time-Warner acqui­si­tion of EMI, effec­tively nul­li­fy­ing the trans­ac­tion. (“EMI, Warner Appear Set to Aban­don Deal” by James Hard­ing; Finan­cial Times; 11/7/2000; p. 26.)

6. Echo­ing past dis­cus­sion of the EU’s de-facto oper­a­tion as a vehi­cle for “pan-German cor­po­ratism,” the broad­cast under­scores the poten­tial sig­nif­i­cance of Bertelsmann’s merger talks with EMI in the wake of the demise of EMI/Time-Warner deal. (“Ber­tels­mann Loses Top Two Music Exec­u­tives” by Christo­pher Parkes and James Hard­ing; Finan­cial Times; 11/6/2000; p. 30.)

7. A BMG-EMI deal would cre­ate the largest music com­pany (by sales), in the world. (“Ber­tels­mann and EMI Hold talks on Merger” by James Hard­ing, Peter Thal Larsen, Bertrand Benoit and Deb­o­rah Har­g­reaves; Finan­cial Times; 11/11–12/2000; p. 8.)

8. This under­scores Ber­tels­mann CEO Thomas Middlehoff’s promise to have BMG in the #1 posi­tion in the world. (“Ger­mans Chart a Course towards No. 1″ by James Hard­ing; Finan­cial Times; 11/11–12/2000; p.8.)

9. The influ­ence of Mid­dle­hoff (and Ber­tels­mann) are ampli­fied by his pro­fes­sional “net­work­ing” asso­ciates that include his good friend Jean-Marie Messier (head of Vivendi, the firm that just acquired Seagram’s Uni­ver­sal Music, cur­rently #1.) (“A New Net Pow­er­house?” by Jack Ewing; Busi­ness Week; 11/13/2000; p.49.) Mid­dle­hoff sits on Vivendi’s board of direc­tors. (Idem.)

10. Andreas Schmidt, the CEO of Bertelsmann’s e-commerce divi­sion, who arranged the deal with Nap­ster, is a for­mer bor­der police­man who, iron­i­cally enough, had his hear­ing dam­aged by a prac­tice grenade. (“The Man Behind Project Thun­der­ball” by Jack Ewing; Busi­ness Week; 11/13/2000; pp.50–51.)

11. Aim­ing to become num­ber one in all of e-commerce, Ber­tels­mann solid­i­fied its posi­tion in the field of “e-books” when its Ran­dom House divi­sion expanded its elec­tronic books inven­tory. (“Ran­dom House Fires a Shot in E-Book Feud” by Matthew Rose; Wall Street Jour­nal; 11/1/2000; p. B1.)

12. Ber­tels­mann owns roughly 50% of Barnes&Noble.com, a com­pany that might com­bine with its par­ent, the Amer­i­can book retail­ing giant. (“Barnes & Noble to Link with Dot-Com Ver­sion” [Bloomberg News Ser­vice]; San Fran­cisco Exam­iner; 10/27/2000; p. B-1.)

13. Bertelsmann’s con­trol will be extended in pub­lish­ing, where the com­pany will be inte­grat­ing its Euro­pean and Latin Amer­i­can pub­lish­ing units. (“Media Titan Sur­veys His Empire at Frank­furt Book Fair” by David D. Kirk­patrick; New York Times; 10/23/2000; p. C-19.)

14. Bertelsmann’s influ­ence over pub­lish­ing is already vast. (Idem.)