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iTunes paying The Beatles direct

By | Published on Friday 7 January 2011

The Beatles

Sources have told Billboard that the deal that finally got The Beatles catalogue onto iTunes late last year sees the Fab Four getting their artist royalty from any download sales directly from Apple – paid, of course, to the other Apple, Beatles company Apple Corps – while Sony/ATV, publisher of most of the band’s songs, is also being paid directly.

This is as opposed to the usual system whereby the wholesale price for every Beatles download sold would go from Apple to record company EMI, which would then pass on the mechanical royalty to Sony/ATV (usually via a collecting society) and pay the artist any royalty they are due.

iTunes paying out directly to Apple Corps and Sony/ATV will mean they see their cut of the money quicker, and presumably, certainly in Apple Corps case, will mean they get a much bigger cut of revenues than the norm, whereby a premiere league artist could probably expect to receive up to 25% of wholesale price. Other rumours suggest Apple Corps could be getting half of the wholesale fee for each download, possibly after Sony/ATV takes its cut.

Also interesting is Billboard’s suggestion that this kind of set up looks more like a ‘licensing deal’ than a standard ‘record sales arrangement’, though EMI insists it was not a licensing agreement that got The Beatles onto iTunes.

In some ways how you refer to whatever deal was done is just semantics, though, as previously reported, for artists and record companies whether digital music arrangements should be classified as licensing or conventional record sales deals is important because an artist’s cut has traditionally been higher in the case of the former. Some artists still on pre-internet contracts argue that when labels sell music via iTunes they are actually licensing music to the Apple download store and should therefore pay a higher royalty to artists.

Attempts by a handful of artists to enforce that interpretation of the digital domain in the US courts have in the main not been successful. Though, of course, the dispute between Universal Music and FBT Productions, the royalty-share-holding producers of Eminem’s early recordings, which centres on this very issue, is ongoing.