“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.