Bertelsmann Losing Canadian Music Deal

Bertelsmann Music Group will lose a big chunk of its North American business in September when the German conglomerate loses its Canadian distribution deal with Zomba Music Group, home to such pop stars as Britney Spears, ‘N Sync and the Backstreet Boys.

Bertelsmann, which has relied on Zomba recordings to prop up its market share in Canada for nearly a decade, was told recently by the New York-based Zomba that it would not renew its deal. Sources say Zomba may be close to making a Canadian pact with EMI Group, the British conglomerate that distributes Zomba’s music in many regions outside the U.S.

Zomba has about a month to decide whether it also will pull the plug on its U.S. distribution deal with Bertelsmann. Such a move would be devastating to Bertelsmann, which derives more than a third of its 15% share of the U.S. music market from distributing Zomba music.