PolyGram
PolyGram N.V. was a multinational entertainment company and major music record label formerly based in the Netherlands. It was founded in 1962 as the Grammophon-Philips Group by Dutch corporation Philips and German corporation Siemens, to be a holding for their record companies, and was renamed "PolyGram" in 1972. The name was chosen to reflect the Siemens interest Polydor Records and the Philips interest Phonogram Records. The company traced its origins through Deutsche Grammophon back to the inventor of the flat disc gramophone, Emil Berliner.
This article is about the former record company and Universal Music Group's current film unit. For the defunct PolyGram Filmed Entertainment whose assets belong to Universal Pictures, see PolyGram Filmed Entertainment. For the geometrical figure, see Polygram (geometry).Company type
1962 (original; as Grammophon-Philips Group), a joint venture of Philips and Siemens
2017 (Relaunch as PolyGram Entertainment)
1999 (original)
Sold to Seagram and folded into Universal Music Group until 2017. Label still used by UMG's PolyGram Entertainment and for some of its label divisions in certain regions.
The 1996–1999 PolyGram Filmed Entertainment catalog is currently owned by Universal Pictures (part of Comcast).
The pre-1996 PolyGram Filmed Entertainment catalog is currently owned by Metro-Goldwyn-Mayer (part of Amazon).
Later on, PolyGram expanded into the largest global entertainment company, creating film and television divisions. In May 1998, it was sold to the alcoholic distiller Seagram which owned film, television and music company Universal Studios. PolyGram was thereby folded into Universal Music Group, and PolyGram Filmed Entertainment was folded into Universal Pictures, which had been both Seagram successors of MCA Inc. When the newly formed entertainment division of Seagram faced financial difficulties, it was sold to Vivendi, and MCA became known as Universal Studios, as Seagram ceased to exist. Vivendi remains the majority owner of the Universal Music Group (while the film and television division was sold to NBCUniversal) until 2021. In February 2017, UMG revived the company under the name of PolyGram Entertainment, which currently serves as their film and television division.
Company type
History[edit]
Hollandsche Decca Distributie (HDD), 1929–1950[edit]
In 1929, Decca Records (London) licensed record shop owner H.W. Van Zoelen as a distributor in the Netherlands. By 1931, his company Hollandsche Decca Distributie (HDD) had become exclusive Decca distributor for all of the Netherlands and its colonies.[1] Over the course of the 1930s, HDD put together its own facilities for A&R, recording, and manufacturing.
HDD was commercially successful during World War II because of the absence of American and British competition. Van Zoelen wanted to sell to Philips so that HDD would have sufficient financial backing when their major competitors returned after the war. This led Philips to purchase HDD in 1942.[1]
In the mid 20th century, the majority of large recording companies manufactured both gramophones and records; Philips CEO Anton Philips noted the risk in creating gramophones without an interest in music recording and record manufacture, and that Radio Corporation of America (RCA) had merged with the Victor Talking Machine Company in 1929[2] for this reason. Philips' labs were developing magnetic tape and LPs, and they could support eventual new formats, although other record companies were notably unenthusiastic about experimenting with new formats.
After the war, Philips built a large factory in Doetinchem to produce 78 rpm records. Recording took place in Hilversum, whereas development took place in Eindhoven.
Philips Phonografische Industrie (PPI), 1950–1962[edit]
In the 1940s, the record business was spread out within Philips: research in the Eindhoven labs, development elsewhere in Eindhoven, recording in Hilversum, manufacturing in Doetinchem, distribution from Amsterdam, and exports from Eindhoven. During the late 1940s, Philips combined its various music businesses into Philips Phonografische Industrie (PPI), a wholly owned subsidiary.
PPI's early growth was based on alliances. A merger was first proposed with Decca of London in late 1945, but was rejected by Edward Lewis, Decca's owner. (PolyGram finally acquired Decca in 1980.)
In the early 1950s, Philips set itself the goal of making PPI the largest record company in Europe.
PPI's second attempt at a merger was with Deutsche Grammophon Gesellschaft (DGG). DGG, owned by Siemens AG, and well known for its classical repertoire, had been the German licensee for Decca from 1935. DGG also owned Polydor Records. Shortly after PPI was founded it had made a formal alliance with DGG to manufacture each other's records, coordinate releases, and refrain from poaching each other's artists or bidding against each other for new talent. PPI and DGG finally merged in 1962.
The alliance with DGG still left PPI without repertoire in Britain or the United States. But in 1951, after Columbia had failed to renew its international distribution agreement with EMI, PPI agreed to distribute Columbia recordings outside the United States. Columbia became PPI's distributor within the US. This agreement ran until 1961 when Columbia set up its own European network. PPI signed a worldwide distribution deal with Mercury Records in 1961. PPI's parent company Philips, through its U.S. affiliate Consolidated Electronics Industries Corp (a.k.a. Conelco), acquired Mercury in 1962.
PPI built or bought factories in smaller countries. In 1962, PPI had a large factory in Baarn and factories in France, Britain, Denmark, Norway, Spain, Italy, Egypt, Nigeria, and Brazil.
PPI played an important role in the introduction of the long-playing vinyl record to Europe. Columbia introduced their LP record in 1948, and Philips presented its first LP at a record retailers' convention in 1949. Philips' commitment to LP technology was an important factor in its 1951–1961 deal with Columbia.[3]
GPG and PolyGram, 1962–1980[edit]
In 1962, PPI and DGG formed the Grammophon-Philips Group (GPG) as a joint-venture holding company, with Philips taking a 50% share in DGG and Siemens a 50% share in PPI. In 1971, the UK record labels of Philips, Fontana, Mercury, and Vertigo were amalgamated into a new company called Phonogram, Ltd. In 1972, Grammophon-Philips Group reorganized all its operations and was renamed The PolyGram Group (in some countries, like Argentina, its name was Phonogram), of which Philips and Siemens each owned 50%. In 1977, both organizations merged operationally, integrating the recording, manufacturing, distribution and marketing into a single organization.
The various record labels within PolyGram continued to operate separately. PolyGram gave its labels, as A&R organizations, great autonomy.
After the merger, PolyGram began to move into the US and UK markets, and did so by a process of both formation and acquisition: Polydor Records established its American operations, Polydor Incorporated in 1969, Mercury Record Productions (US) was acquired in 1972 from sister company North American Philips Corp., and became Phonogram, Inc. MGM Records and Verve (US) were acquired in 1972. Subsequent PolyGram acquisitions included those of RSO (UK) in 1975, a 50% stake in Casablanca (US) in 1977 (with the remaining 50% in 1980), Pickwick in 1978, and Decca (UK) in 1980 (the latter acquisition basically brought PolyGram full circle, see the HDD section above). PolyGram acquired United Distribution Corporation (UDC) in 1973, and changed its name to Phonodisc, Inc., and signed international distribution deals with MCA and 20th Century Records in 1976.
In the late 1950s and early 1960s, Philips had been at work on a new consumer magnetic tape format for music. The Philips Compact Cassette was introduced in 1963. It was small and could play longer than an LP. In 1965 the cassette accounted for 3% of revenues, growing in 1968 to 8% and in 1970 to 10.6%.
In the late 1960s, and through the 1970s, GPG/PolyGram diversified into film and television production and home video. RSO's successes included Saturday Night Fever and Grease. PolyGram's highly successful marketing during the disco craze included the Casablanca FilmWorks production Thank God It's Friday (1978) and its associated soundtrack. During the boom in disco, PolyGram's US market share had grown from 5% to 20%. This can also be attributed to multi-million selling albums and 45s by the Bee Gees, Donna Summer, the Village People, Andy Gibb, Kool & the Gang, and rock band Kiss. For a short while in the late 1970s, it was the world's largest record company.[4]
In 1969, PolyGram established a direct mail-order business in the UK, Britannia Music Club, which ran till 2007.[5]
Reorganization, 1980–1999[edit]
Before 1978, PolyGram was losing money. 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, PolyGram was caught off guard by the sudden end of the popularity of disco music, leaving it with an underutilized distribution network, profligate labels, and over optimistic product orders. PolyGram's Casablanca label was known for management spending on lavish industry parties and luxury cars. After 1980, PolyGram's losses had spiraled upwards of US$220 million.
Another contributing factor to PolyGram's financial woes was the massive failure of the big budget musical Sgt. Pepper's Lonely Heart's Club Band (1978). The film starred the Bee Gees and Peter Frampton at the height of their popularity, and featured the Beatles covers by them as well as Aerosmith, Billy Preston, and Earth, Wind & Fire. The film was highly anticipated to surpass the box office success of both the Saturday Night Fever and Grease, mostly due to its popular music stars. The soundtrack LP, based on only advance orders, was released triple platinum. The movie was released to poor reviews and died at the box office. Despite its triple platinum start, the soundtrack LP's sales bombed after the film's release. In turn, record dealers flooded PolyGram with returned LPs. The resulting losses nearly wiped out the profits the company had made on both the Saturday Night Fever and Grease soundtracks. The company took further loses when the disco craze ended in 1979 and record sales for both the Bee Gees and Casablanca's Village People plummeted. PolyGram also experienced losses with the defection of Casablanca's Donna Summer to newly formed Geffen Records as well as the dropping of Andy Gibb, whose personal problems with cocaine and alcohol began to affect his recording career, from RSO. Summer and the Bee Gees also had legal disputes with their labels which further complicated matters. Summer ended her contract with PolyGram in 1980, and was awarded the rights to her songwriting catalog by the courts; she owed them one more album, and finished out her contract by recording her album She Works Hard For The Money (from which the title track was a huge hit in 1983).
In 1980, after PolyGram bought the other 50% of Casablanca Records and Filmworks, PolyGram renamed its existing Casablanca Records & Filmworks unit as PolyGram Pictures with Peter Guber becoming chairman of the company.[6] During the late 1980s and early 1990s, PolyGram continued to invest in a diversified film unit with the purchases of individual production companies.
In 1981, Philips executive Jan Timmer became a member of the Group Management of PolyGram and was appointed president and chief executive officer of newly formed parent company, PolyGram International Ltd. in 1983. 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. Also by 1983, PolyGram's U.S. roster of labels included: