Apple Will Do `Everything We Can' to Lure Beatles to ITunes

Apple Computer Inc., which on May 8 won a trademark dispute with the Beatles over its iTunes music store, said it wants to get rights to sell the digital version of the band's songs through the online service.``We certainly will do everything we can to get them on iTunes,'' Eddy Cue, Apple's vice president of iTunes, said in an interview yesterday. ``The Beatles aren't available in any digital format today but they are going to be one day. We certainly hope that happens on iTunes.''Apple Corps Ltd., which represents the Fab Four's business interests and is owned by Paul McCartney, Ringo Starr, John Lennon's widow Yoko Ono and the estate of George Harrison, is remastering the entire Beatles catalog to make the songs available for downloading for the first time, Apple Corps's managing director Neil Aspinall told a London court last month.An agreement between Apple Corps and Cupertino, California- based Apple makes financial sense, say analysts. Moira Bellas, a spokeswoman for Apple Corps in London, said today she couldn't immediately comment.Songs of the Beatles, who spearheaded the ``British Invasion'' of the U.S. music charts in the 1960s, are the best- known gap in the roster of digital music available to fans. The group ranks among the top artists who songs are most often downloaded illegally, according to The NPD Group Inc. in Port Washington, New York.Opened by Apple Chief Executive Officer Steve Jobs in April 2003, iTunes is the most popular Web site for digital downloads. The service has a catalog of more than 3 million titles, operates in 21 countries and has sold more than 1 billion songs at 99 cents each. The service has more than a 70 percent share of the market for music downloads, NPD said.
Digital SalesThe combination of the Beatles, whose hits include ``Yesterday'' and``Let It Be,'' and iTunes could spur more music fans to buy digital tracks legally. The global recording industry is counting on digital sales, which tripled last year to $1.1 billion, to grow rapidly and offset a continuing decline in compact disc sales.``There's a huge gold mine in the Beatles catalog,'' said Russ Crupnick, a music industry analyst at NPD. ``There are tens of millions of people who have never bought anything from a digital store, and when they do the tendency is overwhelming to buy it from Apple Computer. When you think about a premier artist like the Beatles, it may drag some of those other people to buy.''Analysts said they couldn't estimate the value of the Beatles portfolio in downloadable form. ``It's an impossible number to calculate,'' said Michael Gartenberg, an analyst with Jupiter Research in New York. ``Obviously, it has a psychological impact. Beatles are an icon to classic rock music.''Court RulingA May 8 British court ruling that sided with Apple Computer in a trademark challenge over the ``apple'' logo probably won't hamper a distribution deal, said Crupnick and other analysts.Apple Corps sued Jobs and the computer company, claiming it held the exclusive right to use the ``apple'' logo on music under an 1991 agreement between the companies. The High Court in London this week disagreed, saying the use of the logo on iTunes didn't mean that Apple Computer was branding the recordings offered for sale on the site. Apple Corps said it will appeal the ruling.``Business is business,'' said Gartenberg. ``Apple's strongest argument is that we're the dominant music service in the market and we work with the dominant music player, so you're going to sell more music here. Let bygones be bygones and let's make money together.''While iTunes works with Apple's Macintosh personal computers and other PCs, the service only works with one digital music player: Apple's best-selling iPod. Jobs, 51, has sold more than 50.8 million iPods since introducing the gadget in October 2001.iPod SalesSales of iPods and content sold through iTunes accounted for 50 percent of Apple's sales last quarter, up from 38 percent a year earlier.``They're not going to refuse to market through iTunes since it's the most popular site and it's linked to the iPod,'' said Phil Leigh, an analyst with market research firm Inside Digital Media Inc. in Tampa, Florida. The Beatles' move online ``will affirm to older generations that digital music is the new paradigm and it might lead them to realize they might want to get involved,'' he said.Apple shares fell 86 cents to close at $71.03 at 4 p.m. New York time in Nasdaq Stock Market composite trading.
http://www.bloomberg.com/apps/news?pid=10000103&sid=afX5riljCxjs&refer=us