Apple Incís settlement with Apple Corps has triggered much speculation about the arrival of Beatles catalogue on iTunes Music Store. Whereas this settlement doesnít mean that the catalogue will suddenly appear tomorrow, it was an essential hurdle that needed clearing before it could happen. That said, the numerous other elements being negotiated in this are probably already at reasonably advanced stages and there is speculation that it will happen as early as next week.
So, just how big a deal is getting the Beatles online? Well, quite a big deal actually. For Apple it means that they can finally say that the iTMS is a universal offering with no major gaps. They also get to have a premier music brand on board and a sure thing in terms of sales. However, given the negligible margins in digital music sales the latter factor isnít the key issue. Itís all about enhancing the overall proposition and then using the Beatles brand to build the iPod and iTMS brands (more on that below).
What is means for the Beatles catalogue is access to new customers and, more importantly, strong marketing potential. The physical singles market is in terminal decline, whilst the digital single market is hugely buoyant. If the Beatles catalogue wants to have any relationship with singles sales, it has to be in digital. Why would they want any relationship with singles at all you might ask? Well just look back a couple of years to how the estate of Elvis Presley utilised [manipulated] the singles market to ensure Elvis was number one in the singles charts throughout many weeks of the year. All of which was great exposure and in addition to driving some revenue did a great job of prompting album sales. So if Appleís marketing strength is fully utilised itís not fanciful to speculate that the Beatles could dominate the singles charts in 2007. Combined with, perhaps, a new CD and heavy promotion of existing albums, could generate strong sales. Ironically, iTMS and the digital channel as a whole is not going to mean that much in terms of album sales. Digital music is still just a few percent of total music sales. So its impact on CD sales is key.
There is one other very interesting, if speculative, element to this story, reported in Wired. The thinking goes that the Apple settlement frees up Apple to sell music directly, i.e. pre-install iPods with music, something that the previous agreement with Apple Corps prevented. Wired even suggests that Valentineís Day will see the arrival of a Yellow Submarine iPodÖ
The speculation of course will rumble on and on, but one fantastic piece of conjecture made me smile: some one claimed that Steve Jobs roll neck worn during the MacWorld presentation was only a half roll neck, which was intended to communicate that the iPhone announcement was only half of what was to be announced (i.e. the Beatles was to follow). You couldnít make this stuff up.