Analysts: Having The Beatles on iTunes would be nonevent for Apple

Apple Store“Despite signs that Apple Inc. may land a historic deal with The Beatles to make the band’s entire catalog of music available on its iTunes store, analysts say that such a move would be a ‘nonevent’ in terms of the company’s profits,” Ben Charny reports for MarketWatch.

Charny reportsRumors of such a deal have been circulating for years. Speculation grew to a feverish pitch Friday when ex-Beatle Paul McCartney told Billboard magazine that an agreement with iTunes is ‘virtually settled,” Charny reports. “Currently, none of the digital-music merchants has rights to sell Beatles tunes online.”

“Apple’s iTunes is by far the largest player in the sector, but the company was hampered by a long-running trademark dispute with the band’s music-publishing arm, which is named Apple Corps.,” Charny reports.

MacDailyNews Take: The company wasn’t “hampered” in the least. Perhaps a few of Apple’s lawyers were “hampered” by having to do the work, but the process did nothing to “hamper” Apple who built massive dominance of the legal online music and digital music device markets.

Charny continues, “The two sides reached a settlement in February, which many expected to pave the way for an eventual deal to sell Beatles songs.”

Still, this won’t do much to boost profits at Apple and other online sellers, analysts said during interviews Friday,” Charny reports. “At 99 cents a song, it is believed by most that Apple simply breaks even on song sales.”

“‘Having the Beatles on iTunes is fabulous, but it’s a nonevent,’ according to W.R. Hambrecht & Co. analyst Matthew Kather, who has a buy rating on Apple,” Charny reports. “‘It’s not a needle mover,’ agreed Shaw Wu, an analyst with American Technology Research, who also has a buy rating on Apple.”

Charny reports, “Still, the development is sure to be a boon for music aficionados and for Apple Corps, the company that manages the Beatles’ commercial interests, Wu said.”
There are other values besides pure profits that would make The Beatles on iTunes – especially an exclusive – much more than a “nonevent.” The value of the free PR alone would make it an “event” for Apple. Ditto for the mind share value, although Apple has that in heaps already, having even more couldn’t hurt.

Michael Gartenberg of Jupiter Research says getting the Beatles catalog online is more important to the online music sellers than to consumers, who can buy and rip a CD for the music. “There’s going to be some bragging rights associated with just the nature of having that catalog,” he told MarketWatch. Gartenberg says Apple is favored to win exclusive rights, “if for no other reason than iTunes and iPod are the dominant ecosystem that most players want to be a part of.”

Full audio interviewhere.

55 Comments

  1. PR-

    First, an exclusive 6-12 month Beatles brings a refreshed awareness of iTunes to consumers.

    The move makes the average Joe who does not yet use iTunes, or uses some other music store to think “Yeah, you can’t win by using something else. I might as well give up on Napster and go with iTunes. It’s all going de-DRM anyways, so I need not worry about being locked in.”

    There are still 20% or so of consumers not onboard with iTunes that are using something else. The Beatles could prove as a tipping point for these folks. Count on Apple marketing and advertising this exclusivity of Beatles tracks extremely well.

    Secondly, count on Beatles tracks selling extremely well, which will stun the “experts.” The Beatles are a franchize similar to Lucas’ Star Wars phenomenon. Many people own that trilogy in about as many different formats as people have fingers. VCR, wide-screen VCR, The Special Edition Star Wars, LaserDisk Star Wars, DVD Star Wars, and the list goes on.

    Lastly, analysts have not figured in, nor have they given any thought to, a Beatles Special Edition iPod, which is certainly coming with pre-loaded Beatles music. This product will dramatically boost sales for a quarter or two of Apple’s high-end iPod video product line (which is a highly profitable product).

  2. I still they would get more mileage out of it if Steve announced it onstage on the 11th. When you are talking 40 years, there isn’t much difference between the 1st and the 11th. They could still throw in the 40th anniversary stuff.

  3. ” I keep tellin ya, it’s the Weables that are being released on iTunes in June. They’re a polka band from Montana and a big hit with the “ya sure” crowd.” —Jim-TIV

    If you are suggesting that Beatles music can be equated with a stupid polka band, you should be more careful about letting everybody know what a moron you are.

  4. In similar news, time capsuled analysis from Shaw Wu (sounds like a character from the Manchurian Candidate, right?) stating that “The release of a Bruce Springsteen set on CD should not have any effect on the newly emerging CD market” has been found, along with a detailed report concluding that, “While some might see the release of the Matrix on DVD as a matter of some interest, we do not expect any effect on DVD sales or DVD player sales as most people interested in seeing the film have already done so.”

  5. It may be a non-event profit-wise, but a period of Beatles exclusivity would add further prestige to Apple/iTunes which further enhances its position as the place for future new and exclusive content.

  6. It may be a non-event profit-wise, but a period of Beatles exclusivity would add further prestige to Apple/iTunes which further enhances its position as the place for future new and exclusive content.

    yeah, the 99% marketshare doesn’t hurt either.

    Please. Beatles fans already have all that music in CD form, and have ripped to iTunes long ago. Don’t kid yourself.

  7. Actually, while sales may be nothing to write home about, the marketing that could follow a Beatles announcement would be huge, especially if combined with a newly revised touch-screen Special Edition Beatles White iPod. Many, many people already own Beatles CDs, and thus won’t buy anew from iTunes, but it may drive traffic to iTunes and increase sales of other artists.

  8. Quick – before the “Rock Era” of Elvis and The Beatles, who were the Top 10 biggest selling Music Stars ?

    If you guess Sinatra, wrong, he barely makes the Top 20.

    Bing Crosby is #1, followed by Paul Whiteman, Guy Lombardo, Tommy Dorsey, Billy Murray, Benny Goodman, Glenn MIller, Henry Burr, Peerless Quartet, and Harry MacDonough.

    WHAT ? You say you’ve never heard of many of those ?

    That’s my point.

    If The Beatles are going to sell anything, they better get busy. Their fans will be dying off before too many more years pass. And however ‘Artistic’ Sgt Pepper may be, it’s appeal will ONLY be via ‘Art’ or Historical Value, and not Commercialism.

    How long since YOU bought any Bing Crosby songs ?

    Thank You
    BC Kelly
    Tallahassee Fla

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