Beatles Cut a Better iTunes Royalty Deal
According to Reuters industry insiders report that the terms of the deal between the Fab Four and Apple may be far more groundbreaking than first imagined, with direct payments being made from iTunes download sales to Apple Corps, the band's company.
The report also claims that songwriting mechanical royalties are paid directly to Sony/ATV Music Publishing, which owns the rights to most of the band's catalogue. None of the companies involved have made an official comment on the matter.
However, if the sources cited in the report are correct, it could mean that the deals are far more lucrative for Apple Corps than standard artist-retailer deals. Usually when an album is released the record label -- which in this case would be EMI -- takes responsibility for licensing and collecting wholesale revenue from retailers, a percentage of which is then paid to the publisher and artists in the form of royalties. Big artists generally receive 20 to 25 percent.
The sources claim that the deal between The Beatles and iTunes is more like a licensing pact, where revenue from use of a master recording is split evenly between an artist and the record label.
Artists including Cheap Trick and the Allman Brothers have argued that digital download deals should be seen as a licensing pact rather than a standard arrangement and both took their record labels to court in an attempt to win what they saw as their fair share of royalties. The Cheap Trick case was settled out of court but the Allman Brothers' case is ongoing.
The Beatles' music finally made it into iTunes in October 2010, after years of wrangling, which suggests that the final deal struck between both sides was anything but typical. However, we would again stress that these reports are unconfirmed.