What The Beatles Bring to Apple
It's the 21st century British invasion: The Beatles have come to iTunes, closing the biggest hole in the product lineup of the world's biggest music retailer.
Apple's iTunes Store now offers 16 Beatles albums, tracks at $1.29 each, and a $149 box set that includes all the music, plus lyrics and performance footage.
From a financial perspective, it's important to understand the Beatles news within the context of iTunes, and its importance to Apple .
iTunes itself isn't a big profit generator; the money Apple gets from music and video downloads covers the cost of its data center infrastructure without much left over. But iTunes might be the single most important strategic asset Apple has; it is the foundation that Apple has used to build its mobile success.
Through iTunes, Apple has sold more than 12 billion songs and 450 million TV episodes; it also has more than 160 million credit cards on file in 23 countries. The significance of that: through iTunes, Apple has created a platform for managing and distributing digital content to all of its computers and devices. It gives Apple an advantage versus competitors like Google and Microsoft.
So how will arrival of The Beatles affect iTunes — and Apple — financially?
It's tough to make a great dollars and cents prediction, since the music itself isn't much of a moneymaker. But here are a few things to consider:
One, The Beatles are still the biggest band in the world by some measures. Every year since 1991, they've sold more than 1 million units, according to SoundScan. (That's like going platinum every year.) So their arrival on iTunes can't be compared to just any other band.
Two, The Beatles catalog come to iTunes with more than just the songs — it also comes with artwork, lyrics and concert footage. That content goes into a format called iTunes LP. That makes The Beatles not just a major music launch — it's a major video and multimedia launch.
So three, if Apple plays its cards right, The Beatles catalog could drive sales of two of its newest products: the iPad and Apple TV. The iPad's screen and the flat-screen TV are designed to be platforms for rich media consumption, and after today, the Fab Four could help Apple demonstrate that during the critical holiday season.