This story appeared on Network World at
http://www.networkworld.com/columnists/2010/111710-bradner.html

The Beatles on iTunes: I want to hold your bits

'Net Insider By Scott Bradner, Network World
November 17, 2010 11:22 AM ET

It is amazing what will catch the fancy of the news media. For example, Nov. 16 was “British day” in U.S. publications. The day started out with just about every newspaper and TV station covering an anticipated announcement that the Beatles were coming to Apple iTunes, and the day ended with saturation coverage of the engagement of Prince William and Kate Middleton.

The fact that a band that broke up about 40 years ago could command such attention may tell us more about the age of news directors than current tastes. The fact that the attention was over making a bunch of old recordings available in yet another way tells us quite a bit about how things work in the music business these days.

The news that the Beatles were going to be available via iTunes made quite a splash. The news was one of the first stories on most newspaper Web sites from the first thing in the morning of the announcement until mid-afternoon when the engagement news hit. Google News found more than 3,000 news stories by 10 hours after the announcement. The Beatles were one of the last few artists that had been holding back from the digital availability movement. Now there are just a few major ones left, including AC/DC, Garth Brooks, Def Leppard, Black Sabbath, Frank Zappa and Kid Rock.

ITunes may be only one of many legal music download sites, but it dominates the business and public mindshare. According to published reports, iTunes includes more than 14 million songs available worldwide and has sold over 10 billion downloads. Apple is the top way that people get their music these days - and that does not look like it is going to change anytime soon.

All of the Beatles music was widely available on the Internet well before the iTunes announcement. Not legally, but widely available none the less. ITunes mostly made it legal. There have been a lot of stories as to why it took this long to get to this point -- from corporate animosity, to reproduction quality, to prices -- but the deed is now done and it just makes Apple stronger.

Apple has gotten a bit more flexible on pricing since it first brought the music industry, kicking and screaming, into the legal digital download age. The amount of coverage the Beatles announcement got is a measure of how ubiquitous legal digital downloads have since become in the music business. This is not to say that most of the music industry has been lining up to thank Apple for this development. Like most content owners, the music industry has a rather inflated view of the value of its product and would raise the prices considerably if it could. This is perfectly illustrated by book publishers who charge the same, and in some case more, for digital versions of their books.

The future of the music industry, like the future of just about all content businesses, is in legal distribution over the Internet. Apple was able to force the music business to properly balance price and profit. They are letting book publishers learn a proper balance on their own and it looks like it will take a while. Netflix is helping the movie industry in their learning process. The Beatles on iTunes is just another exclamation point on the success of the legal digital content distribution paradigm.

Disclaimer: Harvard makes use of iTunes but I have not seen any university opinion on the importance, or lack of it, that the Beatles show up as well. So the above is my own opinion.