Beatles business: Still making money, 50 years on
The Beatles earned a total of $10,000 from three performances on "The Ed Sullivan Show" in 1964. A month before the 50th anniversary of their debut on the show, they're still making millions.
They could have gotten more for even a single performance on the popular television show back, but their manager, Brian Epstein, negotiated a lower sum for top billing and increased exposure.
He was right. The Beatles were the headliners for each program and got a massive TV audience—including a then-record 73 million viewers for their historic U.S. TV debut on Feb. 9, 1964.
That kind of thinking, combined with a relentless drive and vast musical history, has kept the Beatles brand making money half a century after John, Paul, George and Ringo took America by storm.
"Their financial impact today is bigger than any other artist, living or deceased," said David Fiorenza, a Villanova University economics professor who specializes in art and entertainment.
"The surviving members and the group's holding company continue to search avenues that weren't available to them in the mid-1960s," he said. "They've always been on the cutting edge."
The business legacy of the Beatles started immediately, said John Covach, a rock historian who teaches a Beatles course at the University of Rochester.
"The Gretsch and Rickenbacker guitars they used on Sullivan just flew off the shelves the next day," he said. "Kids wanted to be like them, from the instruments to the haircuts."
There's no question that Beatles music sells.
As of this year, the Beatles have sold 600 million albums worldwide—with 177 million sold in the U.S. alone, according to the Recording Industry Association of America. Elvis Presley is second in the U.S., with 135 million sold.
The group once held the top five spots on Billboard 100—in April 1964—an achievement that's likely to remain unmatched. They made $25 million in earnings that year, which translates to almost $188 million today.
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Apple Corps, the Beatles holding company controlled by Paul McCartney, Ringo Starr and the estates of John Lennon and George Harrison, continues to push out products.
In 1995, there was the release of the "Beatles Anthology" documentary, along with the book and CD. A compilation of No. 1 hit singles from the U.S. and U.K. was released as an album in 2000—and went to the top of the charts. It became the best-selling album from 2000 to 2010.
Other deals include the "Beatles Rock Band" music video game, released in 2009—with multimillion sales—as well as the ongoing show "Love," which features Beatles music and performances by Cirque du Soleil in Las Vegas.
The TV show "Mad Men" paid about $250,000 for the rights to use the Lennon-McCartney song "Tomorrow Never Knows" in an episode in 2012.
Also in 2012, after years of squabbles with Apple Inc. over naming and music rights (the Beatles formed their company in 1968 for tax advantages; the computer company was founded in 1976), the group finally allowed their music to be sold on iTunes.
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"It's remarkable for a band that stopped recording in 1970, they still have such interest," said Darrin Duber-Smith, a marketing professor at Metropolitan State University of Denver.
He said that what has helped the Fab Four's staying power is being a first mover. In marketing terms, that means they were the first in their category and came to symbolize a significant moment in time.
"They represent the British musical invasion and the change in music that came with it," he said. "We've had other moments, like with Pearl Jam and Kurt Cobain, but nothing like the Beatles did for their time. They were a transformative band, and that has longevity."
Of course, Yoko Ono aside, the business side of things helped end the Beatles' recording career.The death of Epstein in 1967 from a prescription drug overdose sent the group, by their own admission, into a business tailspin.
The resulting bickering over managing their financial affairs kept the band members battling each other into the mid-1970s. It reached a point where Apple Corps, once listed on the London Stock Exchange in the 1960s, nearly dissolved in 1975. But it was kept on to manage the business aspect of the Beatles recording library.
It turned out well, as Apple Corps ranked second in 2010 on Fast Company magazine's list of the world's most innovative companies in the music industry.
Rumors of a Beatles reunion—and there were many—ended suddenly with Lennon's murder in 1980. Twenty-one years later, George Harrison died of cancer. But both continue to sell records, with Lennon's estate taking in some $12 million in 2011 and Harrison's $6 million that year.
McCartney and Starr still tour and make music headlines. Both are scheduled to appear on the Grammy Awards on Sunday and will tape a concert to help mark the 50th anniversary of their Sullivan performances.
There could be more money ahead for him and the Lennon estate in 2018. That's when full rights to the Lennon-McCartney song catalog revert back to the songwriters. Lennon and McCartney have received a percentage of royalties over the last decades. Singer Michael Jackson outbid McCartney in 1985 for the rights—paying nearly $50 million for them. Jackson later sold half-rights to Sony for $95 million.
'When was the bubble going to burst?'
Interest in the Beatles only seems to grow.
"We're having a Beatle specialty events the weekend of the anniversary of their stay here," said George Cozonis, managing director of The Plaza, where the Beatles stayed for their first Sullivan appearance. "They became part of The Plaza's history. We expect it to be packed."
(Clarification:The Plaza said on Friday Feb 7, that it is not holding any special events over the weekend but will mark the anniversary with a special cocktail program.)
Covach said more than 20,000 people have registered for his next course on the Beatles. "It's incredible how people can't get enough of them," he said.
The Beatles themselves were circumspect about their longevity, according to Larry Kane, a former news anchor in Philadelphia and reporter who covered the Beatles on their U.S. tours in 1964 and 1965.
"It was always a big question for them—when was the bubble going to burst," said Kane, who has written three books about the band. "I don't think they had any idea it would go on like this."
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But there was one among them who did.
"I asked Brian Epstein in 1964 how long it would last," Kane added. "He said, 'Larry, the children of the 21st century will be listening to the Beatles.' He was right."
—By CNBC's Mark Koba. Follow him on Twitter @MarkKobaCNBC.