PolyGram

PolyGram was the name from 1972 of the major label recording company started by Philips as a holding company for its music interests in 1945. In 1998, it was sold to Seagram and made part of Universal Music Group.

Reorganisation, 1980-1998

However, a crisis was looming. Before 1978, with the acquisition of UDC, the distribution organisation was too large and PolyGram was making losses. When US operations were running at full capacity, PolyGram expanded aggressively, and would press large quantities of records without knowing the demand. In late 1979, the disco boom busted, leaving the company not only with an underutilised distribution network but with overoptimistic product orders and profligate labels. For example, Casablanca was notable for management spending on luxury cars and cocaine. From 1980 onwards, PolyGram was running up tremendous losses. Legal documents put the company's total losses at not less than US$220 million.

Related Topics:
1978 - 1979 - Cocaine - 1980

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In 1983, Philips manager Jan Timmer was appointed CEO. He cut the workforce from 13,000 to 7,000, reduced PolyGram's LP and cassette plants from eighteen to five and decreased the company's dependence on superstars by spreading the repertoire across different genres and nurturing national and regional talent. By 1985, PolyGram was profitable once more.

Related Topics:
1983 - 1985

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After an attempted 1983 merger with Warner Music failed, Philips bought 40% of PolyGram from Siemens, and in 1987 the remaining 10%.

Related Topics:
1983 - Warner Music - 1987

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The compact disc, invented by Philips and Sony, helped greatly in boosting the company's sales and market share. PolyGram's strength in classical music helped greatly, as many of the CD's early adopters were classical music lovers. Total US sales of CDs were 1 million in 1983, 334 million in 1990 and 943 million in 2000. Total UK sales were 300,000 in

Related Topics:
Compact disc - Sony

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1983, 51 million in 1990 and 202 million in 2000. The CD increased PolyGram's profit margin from 4-6% in the mid-1980s to 7-9% by the early 1990s.

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In 1989, Philips floated 16% of PolyGram on the Amsterdam stock exchange, valuing the whole company at $5.6 billion. PolyGram embarked on a new program of acquisitions, including A&M and Island Records in 1989, Motown in 1993, Def Jam in 1994 and Rodven (Venezuela) in 1995.

Related Topics:
A&M - Island Records - Motown - Def Jam - Rodven

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In 1998, Philips sold PolyGram to Seagram and it was merged into Universal Music Group.

Related Topics:
Seagram - Universal Music Group

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