APPLE PAYING BEATLES DIRECTLY IN iTUNES DEAL,SOURCES CLAIM

In order to secure the Beatles' music for iTunes, Apple agreed to pay the band's company (Apple Corps) directly, according to industry sources contacted by Reuters. The newswire agency notes that under a typical music contract, a label distributes a record, licenses songs from publishers, collects revenue from retailers and then makes royalty payments to the artists and the publisher. In the case of the Beatles and iTunes though, the digital download royalties are said to be going straight to Apple Corps, while the songwriting mechanical royalties are going to Sony/ATV Music Publishing, which owns most of the Beatles' songs.

If record label EMI is treating its iTunes deal as a licensing arrangement, as suspected, the revenue based on use of a master recording may be getting split evenly between the label and the band, making the latter's share far higher than usual. Under a traditional arrangement the Beatles would get about 18 to 22.5 cents per track, based on a 20 to 25 percent "superstar" royalty rate taken out of the roughly 90 cents Apple would owe EMI.

One source insists, however, that it is "absolutely incorrect" to describe EMI/ iTunes/Apple Corps setup as a licensing deal, and no spokespeople have gone on record. The Reuters report nevertheless suggests that great expense may have been paid to get the Beatles' music, long a conspicuous gap in the iTunes library. Apple launched a major marketing campaign to inaugurate the band's catalog, going so far as to make it a central focus of TV ads and retail displays.