The Beatles, in their early days, recorded a cover version of Money (That’s What I Want), which kinda summarises the predicament faced by Guy Hands who, these days, owns the Fab Four’s record company EMI. They remain, after the apparant success of the re-release of all their material last September arguably their most lucrative act.
So, here’s a trouble-making tilt at trying to size the Beatles business, derived with the help of an independent industry mole. Being totally unofficial, I know EMI won’t agree with any of this.
Let’s start with the UK. So far, sales figures suggest 540,000 single CD albums have been shifted so far (remember no Beatles on iTunes) — and another 40,000 of those box sets with every album in.
Those in the know say the dealer price on the CDs was £6 a shot. That’s the price the shop pays to the record company when an album is actually sold. On the box sets, I’m told the dealer price was £100. Multiply all that up and you get £7.25 million of turnover for the UK.
Now, the Beatles are a global band, and you should assume that the UK is, say, 20 per cent of the worldwide Beatles market. The UK’s natural share of global music is about 10 per cent, but The Beatles are from Liverpool not Yokohama. On a 20 per cent basis, global Beatles sales would amount to £30 million.
But if you wanna hold EMI’s hand here, you can assume that the UK is merely 15 per cent of the global market. In which case, it’s £48 million revenue worldwide. Which is a higher number of course, but it’s all about to get smaller again.
Then you have to knock off costs and other royalties. What is The Beatles royalty? Well nobody is going to tell you that, but it could be as much as 35 per cent. An easier way, though, to work out what’s left by way of income, is to assume a profit margin for EMI of about 20 per cent.
That’s high (but not as high as the legendary Beatles royalty) but this is not a new act that need to be promoted very hard. So, after all these sums, you get a profit in a crude range of £7.5 million to £10 million.
My mole charitably describes this as “piss in the wind” given the £2.7 billion debt mountain and “frankly not replicable for their 2010 financial year”. Beehive here reckons that’s a bit harsh, because you have to make money on lots of different artists to have a beautiful record company. But you get an idea of how hard this business is.
Now we all adore EMI ’round here, so sing after me: “Your lovin’ give me such a thrill/ But your lovin’ don’t pay my bills”.
