Forbes: Apple vs. Apple; iTunes Music Store just might end up with exclusive Beatles deal

“Apple Computer may not be so lucky this time. Its iTune [sic] Music Store and the iPod digital music player are important strategic products for the company, as it has been touting digital media as part of a new lifestyle-driven marketing image. Songs on the iTunes online store, which has sold more than 10 millions songs at 99 cents each since the April 2003 launch, are already subject to stiff royalty payments,” Arik Hesseldahl reports for Forbes.com.

“The service is as yet only available to users of Apple’s Macintosh computers, but should debut for users of Microsoft’s Windows platform before the end of the year. Sensing a groundswell, Applecorps is likely to want a cut of the action that will only make it harder for Apple Computer to break even on the service. And Apple Computer is going to have a tough time arguing that it’s no longer in the music business,” Hesseldahl reports.

“Apple Computer attorneys are likely to negotiate another big settlement, one that will likely have the company paying royalties as long as it operates the iTunes store. It can certainly afford it, with more than $4.5 billion in cash reserves,” Hesseldahl reports. “And maybe, just maybe, such a settlement will include a deal for The Beatles to appear exclusively on the iTunes store service. While the Beatles may have sung about revolution in the late ’60s, they certainly haven’t seemed interested in the digital music revolution taking place around them. The only digital downloads available of Beatles recording are either very early recordings that Applecorps has no control over, or pirated files on services such as Kazaa or Morpheus. With CD sales on the decline, the Beatles run the risk of losing their appeal to younger generations who generally prefer getting music online.”

Full article here.

32 Comments

  1. Perhaps Apple should spin off a music download service as a wholly owned subsidiary called iTunes Digital Music Corp. It could be linked via the Apple site. They could then protect the words “digital, music, tunes,” and sue anyone who dares to use them.

  2. Its all about greed. No one goes to the apple itunes store because of the apple label the beatles own. Its not infringement on the scale that they are stealing customers from the beatles’ label. I think the smartest arrangment, since nothing Apple Computer is doing is based on using the notoriety of the Apple music label – is to cut them a deal where they get to post their music on the itunes site for free and keep all the revenue generated from their songs specifically. They get a choice seat on the next wave of music, for free – just for hasslling Apple Computer…

  3. To put it the most legal and succinct terms, “this is a mess!” Apple Corps (apple cores, get it?) held the threat of a lawsuit back in the 80s over the then fledgling company. Perhaps SJ was such an admirer of the Beattles (he was) that he agreed to their terms. They settled out of court. Apple Corps beat up on Apple Computer again a few years later, and SJ caved in to their demands. Again, paying a large sum of money out of court. Maybe it’s time for Apple Computer to have a judge decide this? Perhaps the original out of court settlement was under duress. Perhaps Apple Computer got bad advice from their attorney’s? Perhaps.

    P.S. Apple Corps sued EMI, the label that originally distributed, marketed and promoted the Beatles product a few years ago. The company spent millions and millions promoting the group, getting airplay and making them the biggest act of the mid 60s to mid 70s.
    Apple Corps is rotten to the core.

  4. I”m curious who all the players are in this. I know Michael Jackson outbid Paul McCartney a number of years ago to get ‘rights’ (whatever THAT means – especially in today’s climate) to the Beatles Library. The Forbes article never mentions Jackson, who must have a say in the ‘availability’ of the songs ? And what exactally does Apple Corps own ? Can’t be all the ‘rights’ to the songs themselves if Jackson owns them, yes ? Seems a sticky wicket to me. More info is needed.

  5. I have never been a fan of the Beatles…and this really ticks me off. So what if someone has a similar name…Apple Computer v. Apple Corps. Its like having ACME Bonds v. ACME Pest Control. Names don’t mean much.
    Apple Corps may deal with music as does Apple Computer now, but their business models are totally different. Apple is trying to get Digital Music Distribution a REAL reality. They don’t make music. They aren’t taking any money away from Apple Corps.
    It is sad that idealists like the Beatles had sprung a company that doesn’t understand a fair market. Greedy Bastards!

  6. If it’s all about the money, perhaps whatever is left of The Beatles will see this as an opportunity to make some real cash: let the Beatles albums and songs be sold through the iTunes Music Store. (Note there’s no “Apple” in that entity.) I happen to still like The Beatle’s music, but having purchased all the albums I cared to years ago, I’d nonetheless be more than happy to purchase a few gems here and there that I don’t yet own. I seriously doubt that in the minds of the public there is anyone who could confuse Apple Computer with a music company that hasn’t produced anything in 20 years… Heck, give them all a free PowerBook 17″, new 40 GB iPods, and most importantly a new market for their music… Isn’t that what musicians are supposed to want? Or is this about making some lawyers richer?

  7. I’m sure Apple’s legal team explored this issue extensively before launching the iPod. Since they acted so boldly with iPod and iTunes, I’m not worried about an obscure record label taking advantage of our favorite computer company.

  8. There has already been a very good idea (not mine) that Apple Computer should form a wholly owned subsidiary and place iTunes, iTMS, iPod, etc. in this subsidiary. It would be appropriately named “Sosumi” and would not use the Apple Computer name or logos.

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