Joint venture by Sony and BMG (Bertelsmann Music Group) set up in August 2004 which merged both companies' record labels and music companies under one umbrella and effectively reduced the 'Big 5' to the 'Big 4' (the others are Universal Music Group, EMI Group and Warner Music Group). As part of the deal, Bertelsmann retained its music publishing business and both companies act independently of one another in Japan. Following a 2006 appeal by an Independent Music Label Association, Sony-BMG's merger was allowed to proceed within the European Union. It is currently the second largest of the Big 4 with a 21.5% share of the global music market.

It is currently comprised of 8 label group divisions as well as a host of unaffiliated stand-alone labels.

Sony BMG may become known as simply Sony Music Entertainment should Sony purchase Bertelsmann's half of the venture. In 2006, it was reported that Bertelsmann was looking to raise money by leveraging some of its media assets, and that executives from both companies were in talks about possibly altering the current venture. Two sources close to Sony BMG have suggested that Bertelsmann may offer Sony its half of the company, although any changes will likely take months to conclude.