iTunes Pays The Beatles Directly, Probably By Money-Laden Dump Truck



What were the nigh-implausible terms that Apple agreed to in order to finally compel the Beatles to bring their catalog to iTunes? Did Steve Jobs personally agree to perform on “butt bongos” for Ringo Star’s & His All Star Band? Did Apple’s elite team of corporate espionagers steal back the sentimental leg Sir Paul once gave Heather Mills and return it to his bosom? Did they just liquor Yoko up with a cocktail comprised of a plum floating in perfume served in a man’s hat?

None of the above, sayeth Reuters. Instead, they say — surprise! — it all came down to just paying the Beatles gobs of money directly, instead of paying Sony, who controls most of the song catalog.

Usually when Apple pays out for a song purchased in iTunes, they pay the fee directly to the music publisher, who then passes down royalties to the artist according to whatever their contract stipulates. In the Beatles deal, it looks like Apple is paying royalties to the Beatles directly, while paying “mechanical royalties” to Sony.

This should lead to the remaining Beatles getting bigger royalty checks, and at the very least allows them to keep a closer eye on what the catalog is actually earning, lest Sony decided to stiff them. Greater transparency, in other words.

Reuters speculates, though, that this may actually be about something bigger than just transparency or a slightly higher paycheck, though: they think the Beatles may very well have successfully set a precedent for a music publisher treating digital music sales as a licensing agreement, which could have profound ramifications for the digital music industry as a whole, as licensing agreements bring in a far bigger chunk of the pie directly to the artists. Sony and EMI are adamant on their part that this isn’t what has happened, but that may simply be because they don’t want the dominoes toppling.