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Hey iTunes, don't make it bad...
Just take a sad song and let us download it. The Beatles still aren't available (legally) online.
September 7, 2005: 4:17 PM EDT
By Paul R. La Monica, CNN/Money senior writer
A legal battle between Apple Computer and the Beatles' Apple Corps. may be one reason why Beatles songs aren't available online.
A legal battle between Apple Computer and the Beatles' Apple Corps. may be one reason why Beatles songs aren't available online.

NEW YORK (CNN/Money) The Rolling Stones have fully embraced the digital music bandwagon. Is it time for the Beatles to do the same?

iTunes announced in early August that it had struck a deal with Abkco, the label that owned the rights to most of the Rolling Stones' older material, to provide the entire selection of Rolling Stones' songs online for downloading. The deal includes "A Bigger Bang," the latest Rolling Stones album, which was released on Tuesday.

The Rolling Stones had a prior online music deal with Rhapsody, owned by RealNetworks (Research). But it was not for the group's complete music catalog -- older music (pre-1971) was available only for streaming on Rhapsody, and couldn't be loaded onto a portable music player.

Now hopes are increasing that the Beatles may finally let their songs be downloaded as well.

A deal for the Beatles' library of music would be, by far, the most significant in the nascent world of online music.

According to the Recording Industry Association of America, the Beatles are, by far, the best selling artists in history, with 168.5 million albums sold. Elvis Presley is No. 2, with 116.5 million albums sold.

"If the Beatles did come on board, I'd imagine you'd see a lot of publicity," said Phil Leigh, an analyst with Inside Digital Media, an independent research firm. "It would have the effect of pressing down the accelerator a bit in the online music business."

Michael Goodman, senior digital entertainment analyst with Yankee Group, a Boston-based tech research firm, agreed.

He noted that the Beatles appeal to an older demographic, who have tended to buy songs and albums from legal online music sites like iTunes, Napster (Research), Rhapsody and the new Yahoo! (Research) Music Unlimited as opposed to illegally downloading songs from so-called peer-to-peer file sharing sites like Kazaa and Grokster.

"There is a clear bifurcation between older listeners who buy music online versus younger listeners who get it free," said Goodman. "The Beatles won't bring in a new generation of users but it will boost revenue because it will appeal to the segment of older listeners who are already buying music online."

Money can't buy me love...or Beatles downloads

But Leigh said that fans of the Fab Four may have to wait a bit longer before they can legally download hits like "Yellow Submarine," "Lucy in the Sky with Diamonds" and "Yesterday." He said that the Beatles were one of the last groups to make their albums available as compact discs in the 1980s.

"They've already established a precedent of being the last to change to a new format," Leigh said.

Then there's the somewhat confusing ownership arrangement for the Beatles' songs.

Record label EMI Music owns the actual master recordings but a spokeswoman for EMI Music said that the company cannot make any decisions regarding online music distribution without the agreement of the Beatles' management company, Apple Corps.

Apple Corps. is controlled by surviving Beatles members Paul McCartney and Ringo Starr and the widows of John Lennon and George Harrison. (A partnership between Michael Jackson and Sony owns the publishing rights to the Beatles' music, which gives them free reign over the use of songs in movies and endorsements, but not any say in online distribution.)

What's more, Apple Corps. has been involved in a legal feud with Apple Computer (Research), which owns iTunes, regarding trademark issues.

This fight is widely believed to be one of the main reasons that Beatles songs are not yet available on iTunes. Representatives from Apple Computer and Apple Corps. did not return calls seeking comment about the lawsuits and speculation regarding an online music deal.

But if the Beatles don't come to an agreement with Apple, which is the clear market leader in digital music since it also makes the wildly popular iPod music player, then what company could they partner with?

Other players such as Napster and Rhapsody are possibilities. And there was even speculation last year that the Beatles were nearing an agreement with Microsoft (Research), which launched its MSN Music online store in 2004, but it appears that nothing has come out of it.

"I am not hearing anything that says the Beatles are any closer to signing an online deal today than they were a year ago," said Goodman.

The EMI spokeswoman said that the company would not comment on speculation about an online distribution deal.

Still, she added that "EMI has made it a big priority and have been in ongoing discussions with Apple Corps. to get the Beatles to make their music available in a digital music format."

So while computer-savvy Stones fans are finally able to get some satisfaction, it looks like Beatlemaniacs that want to buy songs online are going to have take solace in some lyrics from a more obscure song on "Rubber Soul."

"I'll trust in you and know that you will wait for me."

Will Michael Jackson lose his stake in the Beatles catalog? Click here.

To check out the new iPod cell phone, click here.  Top of page

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