Beatles: Here, there and everywhere except iTunes

Tue Sep 8, 2009 7:17pm EDT

Paul McCartney, formerly a member of The Beatles, performs with his band during a concert at CitiField in New York July 17, 2009. REUTERS/Shannon Stapleton

Paul McCartney, formerly a member of The Beatles, performs with his band during a concert at CitiField in New York July 17, 2009.

Credit: Reuters/Shannon Stapleton

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NEW YORK (Billboard) - Could a band that broke up in 1970 really become the best-selling act of the decade?

The Beatles might just pull it off, thanks to EMI Music's September 9 release of their remastered catalog. Eminem currently reigns as the best-selling artist of the decade, with sales of 32 million albums in the United States, according to Nielsen SoundScan, followed by the Fab Four with 28.2 million. The Eminem catalog is sure to pick up more sales by year's end, thanks in part to the continued strong performance of his May release "Relapse," which has sold 1.4 million copies.

Beyond the fan excitement generated by the first remastering of the entire Beatles catalog in more than 20 years, sales will also benefit from the massive marketing push behind MTV Networks' video game "The Beatles: Rock Band," which will be released on the same date. Sources say the game is backed by a $20 million-$25 million advertising campaign, which includes the value of advertising on TV networks owned by MTV parent Viacom. That will provide consumers with a timely refresher course on their favorite Beatles songs -- and perhaps prompt many of them to pick up a newly minted remaster.

EMI is banking on the legendary band to be a strong seller through the year-end holidays. The label is shipping 4 million copies worldwide on street date, including 1.9 million in the United States. The catalog relaunch will also get its own $1 million-$2 million TV advertising campaign, which will include spots on key cable networks like ESPN, TNT, TBS, TV Land, USA Network and MSNBC. Sources say that the primary spend will be at MTV's fellow Viacom sibling Nickelodeon as part of an effort to turn the network's young, game-playing audience into Beatles fans.

And just in time for the start of the holiday shopping season, sources say ABC is planning to air a two-hour prime-time special on Thanksgiving night that will feature Beatles footage and contemporary artists performing Beatles songs.

SoundScan sales tallies of the remastered Beatles albums could be diluted somewhat by a boxed set that includes all of the remastered titles in stereo and a collectible monophonic boxed set of the Beatles albums originally released in mono. According to sources, EMI is shipping worldwide about 150,000 copies of the stereo boxed set and 40,000-50,000 copies of the mono set. Each U.S. sale of either multidisc set will count as only one SoundScan sale, however, which could deflate total unit sales.

Even though EMI has ramped up production of both boxed sets, consumers may find them tough to find initially. Amazon, which took preorders on both versions, says it's sold out based on its initial allocations but is encouraging customers to continue preordering the sets, promising to let them know when more are available. After initial shipments are sold out, sources say the stereo boxed set -- expected to be a popular Christmas gift purchase -- won't be back in stock until late September. The mono set is expected to be back in stock in mid-October.

GAUGING CONSUMER INTEREST

In a year when U.S. album sales are down 14.7 percent to date from the same period last year, sources project the Beatles reissues to generate first-week U.S. sales of more than 500,000, with first-month sales expected to reach 1.3 million. But after that initial burst of fan excitement, how will consumers respond to the marketing of a remastered catalog?

During the '80s and '90s, remastering campaigns provided labels with a reliable means of goosing sales of older titles. Recently, the marketing of catalog reissues has focused less on improved sound quality than on the inclusion of previously unreleased recordings and other bonuses.

None of the Beatles reissues will feature previously unreleased tracks, although in an apparent nod to the need for bonus material, mini-documentaries on each Beatles album will be included in early copies of individual reissue titles and in the stereo boxed set.

It isn't clear whether improved sound will be much of a draw for young music fans, many of whom listen to music through MP3 players and computer speakers.

"Although the sound is different, the songs are the same, so I doubt the kids of today will give a hoot about the remasters, unless the 'Rock Band' game has a positive influence," says Chuck Thatcher, VP of retail at Music City, the Nashville-based parent of the seven-store Cat's Music chain. "I hope the label works the radio stations for airplay of the remasters. That could have an impact on the younger generations."

In addition, some retailers and industry executives question the wisdom of releasing the new Beatles reissues all at once, expressing concern that the simultaneous release of so many titles could dilute sales for certain individual albums. In the late '80s when EMI finally released the entire Beatles catalog on CD, the label staggered the albums' arrival, putting out at most only a few titles at a time and, in the minds of some industry observers, helping extend consumer demand beyond just perennial top sellers like "Abbey Road" or "Sgt. Pepper's Lonely Hearts Club Band."

"I am more of a fan of the staggered release because fans don't have unlimited wallets and to go buy 13 CDs in a single scoop is expensive," says Carl Mello, head of purchasing at Newbury Comics. "Also, with the staggered release, you are giving fans a reason and a date to come back into the stores."

At the same time, a senior distribution executive points out that by releasing all of the Beatles' titles at the same time, EMI can get more bang for its advertising dollars by amortizing the expense over a larger revenue base. Furthermore, the simultaneous release of all of the titles in conjunction with that of "The Beatles: Rock Band" -- and its multimillion-dollar ad campaign -- has already created a full-fledged media event that's also generated an additional wave of free publicity.

CHRISTMAS GREETINGS FROM THE BEATLES

Brick-and-mortar merchants are viewing the Fabs' catalog relaunch as an early Christmas gift that will help push consumers into their stores to buy CDs. That's because the Beatles are among a small number of major acts that still don't make any of their albums available as digital downloads.

While Apple and EMI have discussed releasing the Beatles through iTunes, EMI doesn't have any immediate plans to sell the Beatles' music digitally, sources say, despite speculation that a deal might be announced September 9, when press-savvy Apple has scheduled a press conference to make an iPod-related announcement.

But the band has done quite well sales-wise without embracing downloads. Despite its absence from iTunes, now the top U.S. music retailer, the Beatles' 2000 hits collection "1" is the best-selling album of the decade, while the Cirque du Soleil-related "Love" album has sold nearly 2 million copies and certain individual catalog titles like "Rubber Soul" and "The Beatles" (The White Album) have sold more than 1 million each since the start of the new millennium, according to SoundScan.

Another factor fueling the Beatles' rise during this decade could be the burgeoning strength of catalog sales, which have grown from 34.4 percent of total album sales in 2000 to 41.8 percent in 2008. So far this year, catalog sales account for 46.2 percent of overall album sales.

The Beatles are also the second-best-selling act of the SoundScan era in the United States, with album sales of nearly 58 million copies since SoundScan's launch in May 1991. Country star Garth Brooks is No. 1, with sales of 69.3 million.

Like the Beatles, Brooks doesn't make any of his albums available for purchase as downloads. Coincidence? Some market watchers believe the ability to buy individual tracks cannibalizes album sales. While that may be true to some extent, most executives don't believe it explains the sales superiority of the Beatles or Brooks, which can each count on the loyalty of huge fan bases.

"One could even argue how much bigger they would be if they were available digitally, particularly now, with iTunes accounting for 25 percent of the U.S. market," says one distribution executive, who also made an observation echoed by other executives.

"The fact that they are No. 2 for this decade," he says, "is due to the power of the Beatles."

(Editing by DGoodman at Reuters)

(please visit our entertainment blog via www.reuters.com or on blogs.reuters.com/fanfare/)

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