Unique, lucrative licensing deal brought Beatles to Apple's iTunes

Posted:
in iPod + iTunes + AppleTV edited January 2014
It reportedly took a one-of-a-kind deal in which the band is directly paid royalties from song sales to bring the entire digital catalog of The Beatles to iTunes.



Citing industry sources, Reuters reported Thursday that the parent company of The Beatles, Apple Corps, is receiving royalties directly for digital download sales via iTunes, while "songwriting mechanical royalties" are paid directly to Sony/ATV Music Publishing.



"That suggests the royalty split could be more lucrative for the Beatles than it would be under the typical provisions of a standard artist contract, which treat digital downloads as a retail sale," author Ed Christman wrote.



For "superstar artists," retail royalties are usually between 20 percent and 25 percent of revenue. On iTunes, that amounts to between 17 cents and 22.5 cents for a song that costs $1.29.



Sources reportedly indicated that Apple's deal with the Beatles could mean that label EMI has entered a "licensing pact" with iTunes, which would allow royalty payments to be made directly to the Beatles and Sony/ATV. The report noted that other major artists, like Cheap Trick and the Allman Brothers have attempted to argue in court that digital download sales should be treated as licensing deals rather than equivalent to retail purchases.



"In addition to a potentially more lucrative royalty rate, iTunes' direct payment of U.S. royalties to the Beatles and Sony/ATV would give the band greater accounting transparency over their iTunes sales than they would if EMI distributed the royalties," the report said.



After a long wait, the full catalog of The Beatles arrived on iTunes last November, hyped 24 hours in advance with a teaser on Apple's site that an "exciting announcement" was on the way. The arrival has been heavily promoted with display and television ads.



The arrival of The Beatles on iTunes was a long and difficult road, completed more than 7 years after the iTunes Store first began selling music. Apple and the Beatles' parent company, Apple Corp, were engaged in a trademark dispute for years, before it was finally settled in 2007.
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Comments

  • Reply 1 of 35
    al_bundyal_bundy Posts: 1,525member
    and it was all made possible by Sir Paul's divorce
  • Reply 2 of 35
    juandljuandl Posts: 228member
    This really shows how much Steve Jobs loves the Beatles.



    I bet this is a one and only arrangement with any group.



    (I am sure Bono thought he was tight with Jobs before)
  • Reply 3 of 35
    "Give me money, yeah, that's what I want!"



    Finally, The Beatles are now good "businessmen" as wells great artists!-40 years later!



    I remember, John arguing with Paul back in 1970...."we might as well be accountants!" said John!
  • Reply 4 of 35
    I bet "oh no" Yoko, I mean Yoko Ono, drove this deal! She is pretty smart like that!
  • Reply 5 of 35
    msuberlymsuberly Posts: 226member
    Having taken so long to get the Beatles' music onto iTunes, I doubt sales will be very high. Users, including myself, could simply import their CDs into iTunes. If so, the additional royalty compensation rate described in the report won't matter very much. It does give Apple a (minor?) marketing point for its devices.
  • Reply 6 of 35
    adamiigsadamiigs Posts: 355member
    Quote:
    Originally Posted by christopher126 View Post


    I bet "oh no" Yoko, I mean Yoko Ono, drove this deal! She is pretty smart like that!



    Actually she is a cheap bitch and not that "smart" when it comes to deals like this. It's rather well known that Yoko Ono cost Paul from owning the Beatles catalog and while she "haggled" over price M.Jackson swooped in and bought it. Yes it's another reason Paul hates Yoko and it's quite extensively reported on. Paul was willing to pay the asking price (which MJ ended up paying), but yoko wanted to go in as a partner and swore up and down she could get a deal, it's her trying to low ball the price that lost Paul the rights to his music.
  • Reply 7 of 35
    Quote:
    Originally Posted by AdamIIGS View Post


    Actually she is a cheap bitch and not that "smart" when it comes to deals like this. It's rather well known that Yoko Ono cost Paul from owning the Beatles catalog and while she "haggled" over price M.Jackson swooped in and bought it. Yes it's another reason Paul hates Yoko and it's quite extensively reported on. Paul was willing to pay the asking price (which MJ ended up paying), but yoko wanted to go in as a partner and swore up and down she could get a deal, it's her trying to low ball the price that lost Paul the rights to his music.



    sony got a lot from Jackson but jackson modified his will so that the rest went back to paul. i think that is the case and paul now has more (but not all) of his music back.

    supposedly jackson made 66 million a year from the beatles catalog he purchased back in the day!



    well, looking into it more that all may be bullflop! not sure yet.
  • Reply 8 of 35
    charlitunacharlituna Posts: 7,195member
    Funny thing about licensing is that Apple may have had very little to do with this. The core conflict has always been Sony and EMI, each of whom holds part of the various rights. It is possible that one or more parties wasn't willing to sign off an any digital deal over the way the sales were defined. Apple may not have really cared if it was called a sale or a broadcast because they are getting their cut either way. The only thing they may have had to thumbs up was cutting two checks rather than one and hoping the recording party paid everyone else the right amount



    But had Sony and EMI not come to their agreement over the whole name issue, this would not have happened
  • Reply 9 of 35
    Quote:
    Originally Posted by juandl View Post


    This really shows how much Steve Jobs loves the Beatles.



    I bet this is a one and only arrangement with any group.



    (I am sure Bono thought he was tight with Jobs before)



    Apple's role in the deal isn't the unique part - it's the way Sony and EMI are sharing the royalties that's noteworthy.
  • Reply 10 of 35
    mactoidmactoid Posts: 112member
    Quote:
    Originally Posted by msuberly View Post


    Having taken so long to get the Beatles' music onto iTunes, I doubt sales will be very high. Users, including myself, could simply import their CDs into iTunes. If so, the additional royalty compensation rate described in the report won't matter very much. It does give Apple a (minor?) marketing point for its devices.



    450,000 albums sold during the first week of sales doesn't sound too bad to me!



    http://www.etondigital.com/itunes-be...rks-its-magic/
  • Reply 11 of 35
    Quote:
    Originally Posted by AdamIIGS View Post


    Actually she is a cheap bitch and not that "smart" when it comes to deals like this. It's rather well known that Yoko Ono cost Paul from owning the Beatles catalog and while she "haggled" over price M.Jackson swooped in and bought it. Yes it's another reason Paul hates Yoko and it's quite extensively reported on. Paul was willing to pay the asking price (which MJ ended up paying), but yoko wanted to go in as a partner and swore up and down she could get a deal, it's her trying to low ball the price that lost Paul the rights to his music.



    Interesting Adam. I didn't know that...I just knew she bought a dairy farm or something.



    And yep Paul really got screwed on the rights to his songs..first by Brian Epstein and then again by Yoko! I thought her father was a financier and it sort of was in her genes! Oh Well!



    Off topic: Speaking of fwd thinking people (not Epstein) Desi Arnez, Lucille Ball's husband was the first to negotiate a payment for residuals! Now that is fwd thinking!



    I may have this wrong but William Holden was the first to ask for a percentage of the gross for a film. A little film called Bridge over the river Kwai! Again, I may have that wrong!



    Best.
  • Reply 12 of 35
    Wow if that's true about MJ willing the rights back to Paul...what a magnanimous gesture on MJ's part!
  • Reply 13 of 35
    Uh, might want to check the batteries in your calculator, 20 to 25% of $1.29 is not 17 to 22.5 cents........
  • Reply 14 of 35
    bugsnwbugsnw Posts: 707member
    We all figured it took a little extra something to get the fab four on iTunes.



    If Paul doesn't learn the joys of prenups, his tunes might eventually be owned by a 29 year old cocktail waitress.
  • Reply 15 of 35
    Quote:
    Originally Posted by bugsnw View Post


    We all figured it took a little extra something to get the fab four on iTunes.



    If Paul doesn't learn the joys of prenups, his tunes might eventually be owned by a 29 year old cocktail waitress.



    Funny, Bugs. Talking about rock stars and prenups!



    I remember Rod Stewart being asked what he was up to on a talk show....And he said, "I dunno I may just buy the next girl I meet a house!"



    Paul did handle that divorce well...he was given great advice from his female attorney and that was not saying anything deleterious about his wife in public. Usually the husband always comes off looking like an ogre and the wife looking like an doe-eyed innocent! But in this case Paul, for his whole life has always looked like Bambi! Although, he is starting to look a little like Angela Lansberry.



    She did get $50 mil though!
  • Reply 16 of 35
    Off Topic....I was driving home from Tucson, AZ to my home in Phoenix one evening. I had the top down, the heat on and the radio on. It was a cold clear desert evening and it looked as though you could see every star.



    Without any intro, Paul McCartney's 20 second song, Lovely Linda came on. A song you never hear on the radio....and I knew, right then, Linda had passed away. I thought it was so classy of the station to do that. And then there was a little bit of silence but still no mention or words from the DJ.



    Made me cry!



    FYI: for those of you who don't know they had a ranch in Tucson and that is where she chose to spend her last days. Also, in the '70's Paul just bashed that song out while setting his recording equipment up. What a talent!



    Anyway back on topic...glad the Beatles are on iTunes
  • Reply 17 of 35
    wurm5150wurm5150 Posts: 763member
    Quote:
    Originally Posted by al_bundy View Post


    and it was all made possible by Sir Paul's divorce



    He waited until after the divorce so Heather won't be able to squeeze anymore money out of him.
  • Reply 18 of 35
    chiachia Posts: 687member
    Quote:
    Originally Posted by juandl View Post


    (I am sure Bono thought he was tight with Jobs before)



    Definitely not after the crap Elevation Partners pulled with Palm, it's Pre and iTunes music syncing!
  • Reply 19 of 35
    Quote:
    Originally Posted by ChiA View Post


    Definitely not after the crap Elevation Partners pulled with Palm, it's Pre and iTunes music syncing!



    I wonder if Bono uses a BB or an iPhone? I'm betting an iPhone!
  • Reply 20 of 35
    "The arrival of The Beatles on iTunes was a long and difficult road,"



    But was it winding?
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