Music

Beatles deal with iTunes has Apple paying the band directly

by Ciaran Thompson

When iTunes announced they had inked a deal with the Beatles to sell their songs and albums, it marked a giant leap for the company who had tried so hard in the past to secure the rights to some of the greatest music to have ever been recorded. But new revelations have indicated that the deal is also as groundbreaking on a financial level.

Industry sources say iTunes is paying the Beatles royalties from digital download sales in the United States directly to the band’s company, Apple Corps, and is paying the songwriting mechanical royalties directly to Sony/ATV Music Publishing, who control the majority of the band’s song catalog.

For standard artist contracts, a label issues an album, licenses the songs from music publishers, collects all wholesale revenue from the retailers and then distributes royalties to the artist and the publisher, which in this case means the deal is much more lucrative for the band’s royalties.

In the case of superstar artists, the royalty typically equals about 20%-25% of retail revenue so under a standard contract the Beatles would earn about 18 cents to 22.5 cents per track sale. Because iTunes is making royalty payments to both the Beatles and Sony/ATV, sources say EMI may be treating its deal with the digital retailer as a licensing pact. [Reuters]