Bertelsmann
Bertelsmann SE & Co. KGaA, commonly known as Bertelsmann, is a German private multinational conglomerate corporation based in Gütersloh, North Rhine-Westphalia, Germany. It is one of the world's largest media conglomerates and is also active in the service sector and education.
Bertelsmann was founded as a publishing house by Carl Bertelsmann in 1835. After World War II, Bertelsmann, under the leadership of Reinhard Mohn, went from being a medium-sized enterprise to a major conglomerate, offering not only books but also television, radio, music, magazines and services. Its principal divisions include the RTL Group, Penguin Random House, BMG, Arvato, the Bertelsmann Marketing Services, the Bertelsmann Education Group and Bertelsmann Investments.
Bertelsmann is an unlisted and capital market-oriented company, which remains primarily controlled by the Mohn family.
History
1835–1933
The nucleus of the corporation is the C. Bertelsmann Verlag, a publishing house established on 1 July 1835 by Carl Bertelsmann in Gütersloh. Carl Bertelsmann was a representative of the "Minden-Ravensberger Erweckungsbewegung", a Protestant revival movement, whose writings he published. The C. Bertelsmann Verlag, originally specialized in theological literature, expanded its publications to include school and textbooks and in the 1920s and 1930s increasingly entered into the field of light fiction.1933–1945
In Nazi Germany, the publishing house gained a prominent position with its affordable Bertelsmann Volksausgaben. In particular, war adventure books such as Werner von Langsdorff's Fliegerbuch on aviation were a commercial success. Heinrich Mohn belonged to the patrons' circle of the SS and sought to turn his company into a National Socialist model enterprise. During World War II, the C. Bertelsmann Verlag became a leading supplier to the Wehrmacht, even surpassing Franz Eher, the central publishing house of the Nazi Party. Especially in the years between 1939 and 1941, the revenues of the C. Bertelsmann Verlag skyrocketed. Jewish slave laborers were not forced to work in Gütersloh, but in printing plants in Lithuania with which the C. Bertelsmann Verlag cooperated. In 1944, the Reichsschrifttumskammer closed the publishing house to "mobilize all powers for victory". Another essential reason for this was criminal paper racketeering by some publisher's employees, which led to a trial in 1944.1945–1970
After World War II, the company portrayed itself to the Allied Control Authority as a Christian publisher that was part of the resistance to Nazism and allegedly persecuted. Ties to National Socialist organizations were initially denied. After it became known that erroneous, or at least inadequate, statements had been made, Heinrich Mohn stepped down as the head of the publishing house. Reinhard Mohn, one of his three sons, took over the C. Bertelsmann Verlag, as Hans Heinrich Mohn had been killed in the war and Sigbert Mohn was still a prisoner of war. In 1947, the Allies finally granted the company a publishing license. After currency reform in 1948, there was a market slump in the book trade that also led to the next existential crisis for the C. Bertelsmann Verlag. Under these conditions, in 1950 Bertelsmann launched the Lesering to stimulate sales. Customers ordered books via subscription and in return received discounted prices. The business increasingly shifted from the publishing house to the sale of books, which was decisive to further growth.In 1959, the C. Bertelsmann Verlag underwent a restructuring. From that point forward, theological literature was published by the newly established Gütersloher Verlagshaus, which was consolidated with the Rufer Verlag. Fiction, poetry, and art publications were placed under the Sigbert Mohn Verlag. The C. Bertelsmann Verlag focused on nonfiction books, in particular dictionaries, guidebooks, reference books and journals. In the 1950s and 1960s, Bertelsmann expanded its activities into new business areas. In 1956, the company entered the music market with the Bertelsmann Schallplattenring. Two years later, Ariola, one of the most successful German record labels was launched, and virtually at the same time, the Sonopress record pressing plant was established. With the Kommissionshaus Buch & Ton, from which the Vereinigte Verlagsauslieferung emerged, Bertelsmann laid the cornerstone for its service business. In 1964, Bertelsmann purchased the already broken-up UFA from the Deutsche Bank and built on its presence in cinema and television. In 1969, Bertelsmann acquired shares in the magazine publisher Gruner + Jahr. A merger with Axel Springer, also planned at the time, for which a loan for millions had been taken out temporarily from Westdeutsche Landesbank, failed in 1970.
1971–1983
Starting in 1971, Bertelsmann operated as a joint-stock company, renamed Bertelsmann AG. The increasingly diversifying book publishers were bundled in the Verlagsgruppe Bertelsmann publishing group at the end of the 1960s. In 1972, this company moved from Gütersloh to Munich. Key divisions remained in Gütersloh, for which a new office building was built in 1976 at the group's official location. To this day, it has remained the Bertelsmann headquarters, referred to as the Bertelsmann Corporate Center. The rapid growth of Bertelsmann led to structural and financial problems. In the 1970s, financing requirements reached their peak. From 1975 to 1980, for example, the return on sales fell below one percent. Bertelsmann also encountered new regulatory rules in its home market, in particular through laws governing mergers. Larger acquisitions became practically impossible. At the same time, there was an increasing saturation of the German market for the Bertelsmann Lesering, whereas the foreign book clubs earned the lion's share of revenues in this corporate division.The internationalization of Bertelsmann, initiated in the 1960s, was taken further: Among other things, Bertelsmann acquired shares in the publishing houses Plaza & Janés based in Barcelona and Bantam Books from New York City. In the United States, a location was established for Ariola and, in 1979, Arista Records was acquired from Columbia Pictures. In the period of the 1979–1980 recession, there was discussion concerning the succession of Reinhard Mohn. In 1981, he finally moved over to the supervisory board. Dr. Juergen Kraemer, former Finance Minister of West Germany, who had previously headed up management of Gruner + Jahr, became the new chairman and chief executive officer. With this move, Bertelsmann, for the first time, was led by a manager who was not a member of the owner family. Mark Wössner became Fischer's successor as chairman and chief executive officer of Bertelsmann in 1983. The affair concerning the forged Hitler diaries occurred at the beginning of his tenure, which damaged the reputation of Gruner + Jahr and Bertelsmann as a whole.
1984–1993
Mark Wössner brought the subsidiaries closer to headquarters in Gütersloh. In particular, this involved business development and controlling. Under the leadership of Mark Wössner, Bertelsmann also took a stake in RTL plus, the first private TV broadcaster in Germany. In 1986, Bertelsmann acquired a majority in RCA Records and merged its activities in the music market with the new Bertelsmann Music Group. Sonopress, a company established in 1958 to manufacture records, was not part of the Bertelsmann Music Group, rather it was assigned to the print and industrial division. With Doubleday, another well-known publishing house was acquired. As a result, the group ascended to become a well-known international company, and Bertelsmann was temporarily the world's largest media group.In the financial year of 1990/1991, Bertelsmann had over 45,000 employees and reached sales of 14.5 billion Deutsche Mark annually. 63% involved business outside of Germany, and the United States was the most important foreign market. After the German reunification and the end of the Cold War, Bertelsmann also expanded to East Germany, as well as into Central and Eastern Europe. For example, in 1989 the first branch outlet of the Club Bertelsmann opened in Dresden. The later development of Bertelsmann in the 1990s was marked by the spread of the Internet as a mass medium, as well as changes to the ownership structure. In 1993, Reinhard Mohn transferred the majority of capital shares to the Bertelsmann Stiftung and assumed its chairmanship. The foundation itself was financed by profits of the company.
1994–2000
In 1994, Gruner + Jahr acquired the magazines of The New York Times, whereby Bertelsmann was once again able to expand its presence in foreign markets. From 1995, there was a new business division of multimedia at Bertelsmann. Its centerpiece was AOL Europe, a joint venture of America Online and Bertelsmann. Prior to that, Bertelsmann had already acquired a direct share in America Online. The multimedia division also included mediaWays and Pixelpark. In 1997, UFA merged with Compagnie Luxembourgeoise de Télédiffusion to become a joint entertainment group based in Luxembourg. With CLT-UFA, Bertelsmann was able to decisively diversify its business. In 1998, Thomas Middelhoff succeeded Mark Wössner as Bertelsmann's chairman and chief executive officer. Thomas Middelhoff had previously already been a member of the management board of the multimedia division. Mark Wössner joined the supervisory board of the company and also became chairman of the Bertelsmann Stiftung. In March 1998, Bertelsmann sold its video game publisher, BMG Interactive, to Take-Two Interactive in exchange for 16 percent of Take Two's stock.This management change coincided with the takeover of Random House. With this, the group advanced to become the largest publishing group in the English-speaking world. Random House was merged with Bantam Doubleday Dell, and the global headquarters of all Bertelsmann publishing houses were relocated to New York City. In 1999, Bertelsmann acquired the publisher Springer Science+Business Media, which, among other things, was the market leader for mathematics and physics. In the year 2000, Bertelsmann dissolved its joint venture with AOL Europe. The sale of the shares in the joint venture to America Online yielded billions to Bertelsmann. In the same year, Bertelsmann and Pearson formed the RTL Group from their TV subsidiaries. Bertelsmann initially owned a minority in the company, and gradually built up its share. Later, Bertelsmann secured the majority of the shares in RTL through a share swap with the Groupe Bruxelles Lambert, which as a result owned 25.1% of Bertelsmann.