All You Need is The Beatles
Apple and Apple Corps have put down their dueling lawyers
to finally allow the biggest music seller on the planet to offer digital music
downloads from the most influential band in rock and roll history.
Steve Jobs,
CEO of Apple, said in a statement, "It has been a long and
winding road to get here. Thanks to the Beatles and EMI, we are now realizing
a dream we’ve had since we launched iTunes ten years ago."
Apple
is offering single albums from The Beatles’ collection for $12.99 each, double
albums for $19.99 and individual songs for $1.29. A special digital "Beatles
Box Set," which contains the band’s 13 remastered studio albums with
iTunes LPs and mini-documentaries, the two "Past Masters" albums
and the "Live
at the Washington Coliseum, 1964" concert film (an iTunes exclusive)
will retail for $149.
While Mr. Jobs and company were basking in the glow of
The Beatles, rival Amazon was looking to offset any advantage Apple might have
with price cuts on the band’s music. While there is no news yet as to whether
Amazon will get downloads from the band’s collection, it does sell CDs and
DVDs of titles sold on Apple and more.
Amazon cut its price on the remastered
albums box set from $154.99 to $129.99. It is also selling popular single albums,
such as Abbey Road and Sgt. Pepper’s, for $7.99. The White Album went from
$18.99 to $11.99 on Amazon.
Discussion Questions: What will Apple’s deal to sell digital downloads
of Beatles’ albums mean for iTunes and its competitors? Will Amazon’s response
to the Apple/Beatles news undercut the iTunes launch?
[Editor’s Note] For those who might question the drawing power of a band
that split up 39 years ago, The Beatles sold 3.3 million albums in 2009 according
to Nielsen SoundScan. That put the band at third on the list of all acts selling
albums.
Beatles music availability for download means more money for Apple, Amazon and all of the other sellers. But most of all, it means more money for the Beatles.
I think this is a huge win for both Apples involved in the agreement. Let’s face it: iTunes has no serious competition in the market for digital music delivery, and the iPod/iPhone is the standard MP3 player on the market. The Beatles’ catalogue was a huge void in the iTunes assortment that has now been addressed. Beatles fans (count me in) have downloaded tracks from “Beatles One” or the “White Album” onto our iPods a long time ago, but this gives us a huge opportunity to pick and choose individual songs to add to our libraries without investing in entire albums. (And a nice margin opportunity for Apple, too.) So while Amazon can easily undercut Apple on the prices of entire CD’s, there is no quick substitute for the ease and convenience of digital delivery of single tracks. To Apple, I say…yeah, yeah, yeah!
There’s a saying: “Don’t look at the finger…look at where it’s pointing.”
That’s to say that the release of the Beatles vault of music isn’t remarkable from a product standpoint. What is says in a big way however, is that Apple and iTunes are once and for all cool with the music industry. It’s a move that, in my opinion, finally makes Apple the unquestioned leader in the category.
In short, once you’ve got the Beatles, you’ve got the business.
I can’t imagine this makes much difference to iTunes’ economics. But it does eliminate an annoyance for Apple… people will stop mentioning the feud.
On the other side, The Beatles were missing out on a major distribution channel. It’s well past the point where they need iTunes more than iTunes needs them.
No doubt, iTunes will sell Beatles downloads. Apple makes more money and the Beatles make more money (along with a bunch of lawyers). Will it provide a material impact on a $10 billion industry? Are you kidding?
This could (potentially) bring in a new demographic, the boomers who grew up with the Beatles, to the online music buying marketplace. I ripped my Beatles albums as MP3 years ago and I suspect many others have done so too. But my parents’ generation may just be enticed to try downloading music if the tracks they like are on iTunes. As they say, it’s all about the content.
The Beatles were the second-best-selling artist of the past decade, second only to rapper Eminem. This is a huge win for Apple, as well as The Beatles (and the Lennon and Harrison estates). I was fortunate enough to attend a sold-out Paul McCartney concert at Fenway Park last year and can vouch “Beatlemania” is alive and well. The digital dollars will surely roll in, and this will also help develop an audience for the Beatles among younger music consumers.
Apple’s Beatles get is a brand-builder for sure but it also will serve as a gateway to other music on iTunes. I’m not sure when Led Zeppelin finally appeared on iTunes but one day, there they were. As I downloaded a few of my faves, my Genius Bar alerted me to other long-forgotten tunes. That day’s activity resulted in one of my bigger download invoices. I don’t see the revenue potential as insignificant at all.
By the way, I’m constantly surprised by how many people under the age of 35 cite the Beatles as a favorite band.
Detente is a huge win for younger consumers, who love the Beatles. (The teens of today really like 45-year-old music; if I had been listening to 45-year-old music as a young teen I would have been listening to Al Jolson.)
“All Things Must Pass” so I’m glad that we can now buy the Beatles on iTunes “Eight Days a Week.” Let’s hope the agreement gets us away from “Yesterday” and that it’s not “Hello Goodbye.” iTunes can now have a true sales “Revolution” and “Get Back” to enjoying a true point of difference in the “Day in the Life” for every consumer right before their “Happy Christmas.” In terms of how it will effect others, well, “Let it Be.”
Does the Michael Jackson estate still control a big hunk of the Beatles catalog? I know that Jackson borrowed heavily using his part of the catalog as collateral. Depending on where ownership stands now, the Jackson estate might also benefit from Apple’s deal.
This agreement between Apple and The Beatles will be a shot in the arm for the music download business, which as we know is already prospering and growing. Those logging on to scarf up the now-available Beatles songs are likely to shop around for other titles.
Imagine if half of the 3.3 million Beatles’ albums sold last year were downloads on iTunes. Then figure Apple makes $2.40 per album (being conservative at 30 cents a song/eight songs per album) and you realize that it would have dropped another $4 million (roughly speaking) in revenues to the top line of iTunes. Pretty sure Steve Jobs, Jeff Bezos, et al would take that any year. How many other recording artists deliver that type of result?
This is a win for everyone! Apple, Apple Ltd. the Beatles, and the consumer! There is lots of money, exposure and draw with this addition. Without it…it is just an example of how egos get in the way of consumer demand.
I think this is a bigger deal for EMI than for Apple. It opens up the Beatles’ music to a new generation of music listeners and buyers.
While it’s a coup today for Apple, I would expect EMI to come to similar agreements with Amazon and others before long.
As people know, EMI and the venture/investment firm that purchased them, is in SIGNIFICANT financial distress. This will (at least temporarily) allow them to put off the fire sale that was soon to happen. This should be a huge benefit for EMI, Apple and the Beatles. I would be curious what the revenue share looks like since most artists complain that traditionally Apple has been heavy handed in this process.