In 2004, Sony and Bertelsmann established a 50-50 joint venture called Sony BMG Music Entertainment and transferred businesses of Sony Music Entertainment (former CBS Records) and Bertelsmann Music Group (BMG; Ariola, Arista, RCA Records, etc.) into the joint venture, although later in 2008, Sony acquired Bertelsmann's stake and the company reverted to the SME name. The buyout let Sony obtain all BMG labels, including former Columbia Pictures subsidiary Arista as well as important American labels like RCA, and led to the dissolution of BMG, which instead relaunched as BMG Rights Management. Sony Music Entertainment is one of the "Big Three" record companies, being the second largest after Universal Music Group (UMG) and ahead of Warner Music Group (WMG).
In 1929, ARC was founded through a merger of several record companies. In 1934, in the midst of Great Depression, the Columbia Phonograph Company (founded in the U.S. in 1888), including its Okeh Records subsidiary, was acquired by ARC.
ARC was acquired in 1938 by the Columbia Broadcasting System (CBS), which, in turn, had been formed by the Columbia Phonograph Company, but then sold off. ARC was renamed Columbia Recording Corporation. The Columbia Phonograph Company had international subsidiaries and affiliates such as the Columbia Graphophone Company in the United Kingdom, but they were sold off prior to CBS acquiring American Columbia. RCA Victor Records executive Ted Wallerstein convinced CBS head William S. Paley to buy ARC and Paley made Wallerstein head of the newly acquired record company. The renamed company made Columbia its flagship label and Okeh its subsidiary label, while deemphasizing ARC's other labels. This allowed ARC's leased labels Brunswick Records and Vocalion Records to revert to their former owner Warner Bros., which sold them to Decca Records. Columbia kept the Brunswick catalogue recorded from December 1931 onward on the Columbia label and around the same time the Vocalion label material was reissued on the Okeh label. Wallerstein, who was promoted at the end of 1947 from president to chairman of the record company, restored Columbia's status as a leading record company and spearheaded the successful introduction of the LP record before he retired as Columbia's chairman in 1951. He was succeeded by James Conkling as head of Columbia Records. In 1951, Columbia severed its ties with the EMI-owned record label of the same name and began a UK distribution deal with Philips Records. Okeh Records continued to be distributed by EMI on the Columbia label.
Columbia founded Epic Records in 1953 and in 1956, Conkling left Columbia. He would help establish the National Academy of Recording Arts and Sciences before eventually becoming the first president of the newly launched Warner Bros. Records. His successor, Goddard Lieberson began the first of two stints as head of the record company. and in 1958, Columbia founded another label, Date Records, which initially issued rockabilly music.
In 1960, Columbia/CBS began negotiations with its main international distributor Philips Records with the goal of starting its own global record company. Philips' acquisition of US-based Mercury Records in 1961 paved the way for this. CBS only had the rights to the Columbia name in North America; thus, the international arm that was founded in 1961 and launched in 1962 used the name "CBS Records", with Philips Records distributing the label in Europe. Elsewhere, CBS's Mexican record company, Discos Columbia, was renamed Discos CBS by 1963.