The Beatles Now On iTunes

Apple Begins Sell­ing Bea­t­les Music through iTunes

Novem­ber 16, 2010, 12:32 PM EST | By Adam Satar­i­ano and Andy Fixmer | Busi­ness­week

Apple Inc. began offer­ing Bea­t­les songs through iTunes for the first time, end­ing an almost decade-long stale­mate with the best-selling group.

The band’s 13 stu­dio albums, along with boxed sets and sin­gle tracks are avail­able, Cuper­tino, California-based Apple said today in a state­ment. ITunes, music’s largest retailer, is sell­ing sin­gle tracks for $1.29 and a set of the band’s entire col­lec­tion for $149.

“In 1964, the band that changed every­thing came to Amer­ica,” Apple said on its web­site. “Now they’re on iTunes.”

The absence of the Bea­t­les has been the highest-profile hole in the cat­a­log of Apple Chief Exec­u­tive Offi­cer Steve Jobs’s dig­i­tal store. The band had kept its focus on phys­i­cal media, even as a decline in com­pact discs sent other artists to the Web. Formed about 50 years ago, the Bea­t­les have remained a top-seller, with cus­tomers buy­ing more than 30 mil­lion albums in the last decade, accord­ing to Nielsen SoundScan.

Apple and the Bea­t­les had been embroiled in a long-running legal feud. In 2007, the com­pany and Apple Corps Ltd., the entity that han­dles the Fab Four’s busi­ness affairs, set­tled a trade­mark dis­pute about the apple name and logo.

“It has been a long and wind­ing road to get here,” Jobs said in the statement.

Sin­gle albums cost $12.99 and dou­ble albums are priced at $19.99, Apple said. The albums also will fea­ture unique mini– doc­u­men­taries about their creation.

Com­plex Ownership

Own­er­ship of the Beatle’s music cat­a­log rests with var­i­ous par­ties, includ­ing sur­viv­ing mem­bers of the band Paul McCart­ney and Ringo Starr, as well as Yoko Ono and Olivia Har­ri­son, the wid­ows of John Lennon and George Har­ri­son. The band’s record label EMI Group Ltd., Sony Corp. and the estate of Michael Jack­son also con­trol some rights.

“The Bea­t­les music is one of the most com­plex sets of copy­rights and own­er­ship sit­u­a­tions in the entire his­tory of the music indus­try,” said Aram Sin­nre­ich, a media pro­fes­sor at Rut­gers Uni­ver­sity, who fol­lows the music business.

EMI and its owner, Terra Firma Cap­i­tal Part­ners Ltd., will see a much-needed boost as it faces debt pay­ments to Cit­i­group Inc., which helped pay for the 2007 acqui­si­tion, Sin­nre­ich said. The Jack­son estate, also grap­pling with debt amassed by the late pop singer, also will ben­e­fit, he said.

Apple will sell dig­i­tal ver­sions of the Beatle’s music exclu­sively into 2011, said Dylan Jones, a spokesman for EMI, with­out being more specific.

Sales Value

Adding albums such as “Sgt. Pepper’s Lonely Hearts Club Band,” “Revolver” and “Abbey Road” to the iTunes library will be “eas­ily” worth more than $100 mil­lion in sales, Sin­nre­ich said.

ITunes, intro­duced in 2001, is the largest des­ti­na­tion for buy­ing music in the U.S., big­ger than Wal-Mart Stores Inc. and Amazon.com Inc., accord­ing to NPD Group Inc.

The Bea­t­les had the best-selling stand-alone album between 2000 and 2009 with their col­lec­tion of great­est hits called “1,” which sold 11.5 mil­lion copies, accord­ing to Nielsen Sound­Scan. They are the top-selling band in his­tory, with more than 1 bil­lion albums sold world­wide, accord­ing to London-based EMI.

Apple may be able to invig­o­rate dig­i­tal down­load pur­chases, which have slowed mainly as a result of reduced spend­ing by con­sumers 35 years and older, said Russ Crup­nick, an ana­lyst at NPD Group. The ques­tion is whether peo­ple who already own Bea­t­les music will down­load another copy from iTunes, he said.

Too Late?

“Many of us have already ripped their entire cat­a­log from CDs,” Crup­nick said. “This is really going to depend on whether it’s the equiv­a­lent of what the Michael Jack­son events were for Sony last year, or if they are a bit late to the party.”

Jack­son was the top-selling artist last year fol­low­ing his death, accord­ing to SoundScan.

Before today, Bea­t­les mate­r­ial found its way online as a pop­u­lar tar­get on ille­gal peer-to-peer file-sharing sites, said Eric Gar­land, CEO of BigCham­pagne, which tracks con­sump­tion of media online at legal and unau­tho­rized websites.

“For more than a decade, unau­tho­rized copies of the entire Bea­t­les cat­a­log have been avail­able and pop­u­lar online, but your only legit­i­mate option to buy the music was on CD,” he said.

The rock band AC/DC is among artists who have kept their music from being sold through iTunes, where the range of prices is set by Apple.

Apple fell $4.54 to $302.50 at 12:29 p.m. New York time in Nas­daq Stock Mar­ket trad­ing. The stock had gained 46 per­cent this year before today.

Adding the Bea­t­les won’t cure the ills of the music indus­try, which has faced a decade-long slump in album sales, said Mark Mul­li­gan, an ana­lyst who tracks the music indus­try for For­rester Research.

“The dig­i­tal music mar­ket (and the young music fans record labels’ des­per­ately need to get engaged) need new music prod­ucts, not yesteryear’s hits repack­aged,” Mul­li­gan said today in a blog post.

Visit The Bea­t­les iTunes homepage »



Edi­tors: Lisa Wolf­son, Nick Turner
To con­tact the reporters on this story: Adam Satar­i­ano in San Fran­cisco at asatariano1@bloomberg.net; Andy Fixmer in Palm Springs, Cal­i­for­nia, at afixmer@bloomberg.net

To con­tact the edi­tor respon­si­ble for this story: Tom Giles at tgiles5@bloomberg.net; Anthony Palazzo at apalazzo@bloomberg.net