• The New York Times , Wednesday, August 6, 2008 10:03 AM

Sony is gambling that after years of upheaval caused by digital technology, the music industry will regain its footing. It is buying Bertelsmann's 50% stake in Sony BMG Music Entertainment for $900 million, ending a four-year partnership that generated much dissonance. Bertelsmann retains rights to 200 European artists, giving it a toehold in a business it once dominated.

By folding BMG into its operations, Sony will be within striking distance of Universal Music as the world's largest music company. Its roster of entertainers includes Alicia Keys, Avril Lavigne and Justin Timberlake.

"The advent of the cellphone as a conveyor of music globally takes away a lot of the risk," says Sony's chairman, Howard Stringer.

With other new forms of distribution like Sony's PlayStation Network, as well as huge markets in China and India, Stringer says he envisions a new era of growth, even as he acknowledges that sales of compact discs will continue to decline.

Read the whole story at The New York Times »