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While today's headliners may have been the release of the Mac App Store or the potential thud of the Verizon CES keynote (well, thud if you were hoping for a new iPhone), a tidbit about another recent Apple headliner came out. Apparently the EMI/Beatles agreement that finally allowed for the Beatle catalogue to appear on iTunes may have been a little bit more unique than originally thought.
Industry sources are saying that iTunes is paying the Beatles' royalties from digital download sales in the United States directly to Apple Corps, which is the band's company, and is also paying the the songwriting mechanical royalties right to Sony/ATV Music Publishing, which maintains the Beatles' song catalogue.
What this means is that the royalty split could be paying a lot larger dividends for the Beatles versus the typical standard artist contract, which think of digital downloads as a retail sale.
Under that standard contract, the label issues the album, licenses songs from the music publishers, and takes in all wholesale revenue from retailers and then hands the royalties to the artist/publisher.
Typically for superstars in the music world, a royalty comes to about 20-25% of retail revenue. So if we do the math with the Fab Four's iTunes sales, where tracks get sold to the merchant for 90 cents and then get retailed for $1.29, a standard contract would give the Beatles about 18 cents to 22.5 cents per track sale.
However, with iTunes reportedly making royalty payments to the Beatles and Sony/ATV, EMI could be looking at its deal as a licensing agreement.
Through a deal such as that, the licensee would then pay mechanical royalties right to the publisher and revenue from use of a master recording would then get halved between the artist and label. In other words, the artist scores big time.
Sony/ATV, an EMI spokesman, reps with Apple Corps and iTunes all declined comment. A source familiar with the deal said that it's "absolutely incorrect" that the agreement between EMI and Apple Corps would be looked at as a licensing deal.
Regardless if one looks at the agreement as a licensing deal or not, it's still a pretty huge milestone that the music group are receiving monies right from iTunes.
Follow this article's author, Matthew Tilmann on Twitter