Sunday, April 23, 2006

Why Don't We Do It on the Internet?

Go to iTunes or Rhapsody and search for "Beatles" and where do you wind up? Nowhere, man. The greatest rock group ever doesn't sell its songs online. That's why the managing director of the Beatles' record label, Neil Aspinall, made a stir recently when he revealed that the Fab Four were finally planning to sell their songs on Internet stores—but only after a long-term project of remastering the songs wascompleted.Though Aspinall's comment made news, the impact was mitigated by the fact that the digital music world has already established itself, with no help from John, Paul, George and Ringo. It is telling that his remarks were made in the context of a London court case charging Apple Computer with violating the trademark of the Beatles' record label, Apple Corps, by selling music online. Instead of working with the Net's flagship of legal downloading, the band is suing it.During their heyday, the mop tops could get away with anything (like selling watered-down versions of their U.K. albums in America, or "Revolution No. 9"). But the Beatles today (the living members and heirs of George and John) don't seem to understand that even they can't control the Internet. A glimpse of their thinking came in 2004, when the group considered going online with a service other than iTunes. Microsoft was building an Internet store to compete with iTunes, and the Fab Four's people actually discussed terms with the Softies. According to a source close to the negotiations (who would not be identified because of the sensitivity of the issue), the Beatles wanted $15 million for starters—not as an advance against royalties, but a cash payout—for a window of exclusivity that would end after 90 days. After that the Beatles would be free to sell their songs everywhere else on the Net. Even worse, the Beatles demanded that their tunes be treated differently from any other songs in the store. "It would be a walled garden, a Beatles store within the store," the source told me. "If you bought a Beatles song, you'd go immediately to checkout and wouldn't be able to add anyone else's songs to the purchase." This approach is antithetical to what makes an online music store successful—it must be so convenient and delightful that people pay for what is available on the file-sharing services free of charge. Microsoft walked away.The Beatles' stance only hurts the band. Their obstinacy has not deterred millions of fans from loading Beatles music on computers and MP3 players—it just means that no one pays for the songs. Even George W. Bush has figured out how to get Beatles songs on his iPod. People simply rip the CDs they already own into iTunes or other jukebox software. Or they use their friends' CDs. Or they grab the songs online; according to the market-research firm NPD Group, the Beatles are the fifth most popular band among illegal downloaders.The buzz among digital-music insiders is that if the two Apples settle the court case, part of that arrangement would be a deal that lets the Beatles sell their work on iTunes. (Neither party would comment on that.) The wrong way to do it would be the walled-garden approach, with premium prices for albums and restrictions on buying songs à la carte. The right way would be to follow in the path of another great band, U2, whose iTunes relationship has been a boon for both sides. Put the entire catalog online—as a pricey package for those who want it all, or available by the album or single song for everyone else at standard rates. A Beatles-branded custom-made iPod would be a huge seller. And a cool iTunes commercial with the band in silhouette would be a sensation. During the mania years of the 1960s, John Lennon once described the Beatles as being bigger than Jesus. But in 2006, the Internet is bigger than the Beatles. Instead of fighting the Net, the Beatles can use it to reinvigorate their glory. What happened to "We can work it out"?

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