GPG and PolyGram, 1962-1980
In 1962, PPI and DGG formed the Grammophon-Philips Group (GPG), with Philips taking a 50% share in DGG and Siemens a 50% share in PPI. In 1972 the companies formally merged to form PolyGram, of which Philips and Siemens each owned 50%. In 1977 both organizations merged operationally, integrating the recording, manufacturing, distribution and marketing into a single organization.
The various record labels within PolyGram continued to operate separately. PolyGram gave its labels, as A&R organizations, great autonomy.
GPG needed to move into the US and UK markets, and did so by a process of both formation and acquisition: Polydor Records established its American operations in 1969, Mercury Record Productions (US) was acquired in 1972 from sister company North American Philips Corp., RSO (UK) in 1967, MGM Records and Verve (US) in 1972, Casablanca (US) in 1977, Pickwick in 1978, and Decca (UK) in 1980 (the latter acquisition basically brought PolyGram full circle, see the HDD section above). PolyGram acquired United Distribution Corporation (UDC) in 1973 and signed distribution deals with MCA and 20th Century Records in 1976.
In the late 1950s and early 1960s, Philips had been at work on a new consumer magnetic tape format for music. The Philips Compact Cassette came out in 1963. It was small, played longer than an LP and was robust. In 1965 the cassette accounted for 3% of revenues, growing in 1968 to 8% and in 1970 to 10.6%.
In the late 1960s and through the 1970s, GPG/PolyGram diversified into film and television production and home video. RSO's successes included Saturday Night Fever and Grease. PolyGram's highly successful marketing during the disco craze included the Casablanca film Thank God It's Friday and its associated soundtrack. During the boom in disco, PolyGram's US market share had gone from 5% to 20%. This can also be attributed to multi-million selling LPs & 45s by The Bee Gees, Donna Summer, The Village People, Andy Gibb, Kool and The Gang and rock act Kiss. For a short while, it was the world's largest record company.
In 1969 PolyGram established a direct mail-order business in the UK, Britannia Music Club, which ran till 2007.
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