Common Questions About the Beatles’ Business(es), or “What Are All Those Companies and What Did They Do?”
Originally posted to rec.music.beatles in 1996
spenney@calvin.stemnet.nf.ca (Sean Penney) wrote:
I don9t know what the distinction is between these concepts...
EMI =
Parlophone =
Capitol =
Apple Records =
MacLen =
Northern Songs =
EMI = Electrical and Mechanical Industries, Inc.
This is a recording-industry behemoth that began in 1933 (as The Gramophone Company), making records and record players. As part of the latter business, they established and/or acquired, over the years, a number of record labels under which they released product in various categories. "HMV" (=His Master's Voice") was the prestige label, f'rinstance: it put out classical stuff. Another was...
Parlophone = one of the labels that EMI operated.
Originally the German "Lindstrom" label (hence the "L" on the record labels, which is *not* a pound sterling sign). Under EMI's ownership, Parlophone in the '50s became an "alternate" (or, more accurately, 'junk') label, used to issue comedy, spoken-word, and light-pop orchestra recordings. Management of Parlophone was taken over by George Martin in 1954 when Sir Joseph Lockwood became EMI's chairman and Oscar Preuss, Parlophone's previous manager, retired. Martin worked to make Parlophone a more popular label, and he succeeded. By the early '60s, Parlophone was EMI's biggest moneymaker, with the Beatles and other new rock & roll acts.
Capitol = an American record label purchased by EMI.
Sir Joseph Lockwood took several decisive steps in his first year at EMI. Besides purchasing brand-new LP-presses (a new format EMI had been slow to embrace), he also acquired an American label as an outlet for EMI's 'product.' The one he chose was Capitol. However, despite their new acquisition, EMI management decided that Americans probably knew American music better than the British, and so day-to-day management of Capitol remained in New York and Hollywood. This led directly to the problems George Martin experienced nine years later when he tried to get Capitol to release "Love Me Do," "From Me To You" and "She Loves You." Capitol passed on all of them!
Apple Records = the recording division of Apple Corps.
By the late '60s the Beatles had decided to form their own company to consolidate their business ties and advance their own interests. Apple Corps. was the result: an umbrella company, with Apple Films, Apple Electronics, Apple Records, etc., etc., being the various divisions. Previously, the Beatles had technically been 'contract artists' of NEMS, Brian Epstein's own artist-management company. The contract, which came up for renewal in October of 1967, was allowed to lapse. Meanwhile, the Beatles' merchandising, song publishing, and other interests were scattered hither and yon through a confusing mishmash of other companies. Apple was an attempt to bring everything together. Under the new arrangement (commenced in 1968), JPGR would all jointly own Apple. The Beatles, as a recording group, would be contract artists of Apple. All new merchandising, etc., would be done by Apple (while the old contracts would be allowed to die).
Northern Songs and MacLen = two different song publishing companies set up to handle Paul & John's songs.
Oddly enough, in the late '50s & early '60s song publishing, not records, was where the money was. "Love Me Do" was published by Ardmore & Beechwood, a London firm; but after several months Brian felt they weren't pushing it enough. In November of '62 or thereabouts he spoke to George Martin, who said Brian would want a publisher who was more "hungry." He recommended Dick James -- who ran things out of a tiny office in London. Epstein went to James and played him some Beatle compositions. James agreed to publish them right away. He further agreed to set up a new company for the purpose -- Northern Songs -- profits to be split 50-50 between James and Paul & John (George & Ringo had no songs as yet to be offered). [See “Beatles Business - Part Two” for more details.]
Northern Songs wound up publishing all Lennon-McCartney songs up through 1968. By 1968 the contract began to rankle on Paul & John a bit, though, so they got a bright idea: they'd form a new company, called MacLen, to publish their new stuff -- with 100% of the profits going to themselves! Alas, it wasn't that simple. Paul and John were technically "contract writers" of Northern, and, since Northern was by this time a public company, the stockholders wouldn't have looked kindly on their principal asset running off and writing for a 'rival' publisher. So, Paul and John *tried* to register new songs with MacLen as often as possible; but right up to the end, they still also had songs that went to Northern. (You literally have to check the label to see which songs are owned by whom.)
This means that, by 1970, when the group ended, roughly 4/5 of Paul & John's songs were owned by Northern Songs, and the other 1/5 owned by MacLen.
Northern Songs and MacLen to this day control all of the publishing and licensing of all Lennon-McCartney Beatle songs. "Licensing" is a broad category which covers placing a song in radio and TV ads, movie soundtracks, and any other form where the song makes money (besides albums). As we all know, ownership of Northern passed to Sir Lew Grade and ATV in 1969, and thence to Michael Jackson in the mid-'80s. (For that story see Part Two of this post below.) With this passing, unfortunately, also went control of the licensing for all Northern's songs.
>Does EMI own all of the recordings that the Beatles made?
Even the ones at Twickenham Film Studios and the like?
Nothing is simple. All Beatle recordings made at EMI for the purpose of Beatle records are owned by EMI (up to 1968) and Apple (1968-69). All Beatle recordings made for radio and/or TV (i.e., BBC recordings) belong to the individual company who did the recording (subject to individual contracts). The Decca audition tapes belong to Decca. The German records belong to the German companies. All of the Beatles' Twickenham recordings belong to Apple, since they were made as part of an Apple Films project, "Get Back." Those which turned up on the LP "Let It Be" were licensed to EMI by Apple.
(And if this sounds like a tangled, thorny nest, it is. No wonder the Beatles got exasperated with business dealings towards the end!)
Today, what Apple and/or EMI still own is the right to use any original Beatle recording to make money -- but only in the realm of albums, CDs and tapes. They do not, alas, own the right to "synchronize" these recordings with visual material -- i.e., make a music video, put the song in a movie, or (agh!) in a TV commercial. That right belongs to Northern and/or MacLen.
The relationship between Apple and EMI has another twist. Back in 1968, when Apple was formed, the Beatles still had a ironclad contract with EMI to release all their recordings on Parlophone. As a gesture of goodwill, Sir Joseph allowed them to re-negotiate, so that Apple could put its sticker on Beatle records -- and would technically 'own' all Apple recordings. But in practice, all Apple 45s and 33s still had to be released by Parlophone/EMI. To this day, that's how it remains.
So in the case of "Get Back/Let It Be" it goes like this: the right to publish/license the Lennon-McCartney songs was owned by MacLen; the right to put the songs on film was owned by Apple; the right to put out a record owned by Apple/EMI.
>Who decided to release Anthology I, II and III, EMI?
Paul, George and Ringo?
EMI *and* Paul, George and Ringo?
Did Yoko have a say?
Don't know. Buried somewhere in the Apple/EMI/Beatles contracts there are clauses which govern the right to re-release and repackage the Beatles' records. My guess is that EMI owns the right to repackage any recordings it owns outright (the early stuff); while EMI/Apple would have to negotiate on any joint-contract recordings (the later stuff). But in practice, nobody would probably have undertaken the Anthology series unless everyone were happy with the idea. Starting most importantly with Paul, George, Ringo and Yoko.
>How do royalties work?
Did they have to ask for permission from M. Jackson (Sony Music, now)
to use the songs?
Did they have to *pay* for the permission?
Does Sony have to pay the authors?
Under American law, there's a thing known as the right of "first use" of a song. An author controls who gets to record his song "first." After 'first use,' anyone may record a song without the author's express permission, as long as royalties are paid.
If you have a publishing deal, it's often standard practice that anything you write automatically and immediately becomes property of the publisher. Thus, if you are, say, John Lennon, and you write "Across the Universe," it immediately becomes owned by MacLen. Then, MacLen (which, of course, means you) "gives you permission" to make the first recording of the song. You do. After the song is publicly released, anybody else can now cover it. As long as they pay the royalty.
Royalties fall into two categories: percentage and by-performance. In the percentage category, if you -- who are now, say, James Taylor (change hats!) -- do a cover of "Let It Be" on your album, you have to pay a certain percentage of the album's profits to the song's publishers -- in this case, MacLen. The amount is usually fairly small -- a few cents a record. Then, if this song goes out on the airwaves, you have to pay-per-performance. This is where organizations like ASCAP and BMI come in. These groups listen to the radio 24 hours a day, and when they hear a song, they make sure the performer pays the author.
>Who gets a cut from record sales?
EMI?
Apple?
Capitol?
P., G., R. and Yoko?
George Martin?
Pete Best?
It totally depends on the contract in question, but to take a rough example:
If you plunked down $5 for the LP "Sgt. Pepper" in 1967, pieces would go to (a) EMI (as record presser & distributor), (b) the Beatles (as artists), and (c) Northern Songs (as publisher).
Today it's far more complex. Although I don't know the specifics, never having read the contracts, my guess would be that when you buy "Anthology 1" on CD it goes: (a) the lion's share to EMI/Apple as owners of the recordings; (b) a portion to song publishers MacLen and/or Northern Songs -- this segment to be divided (again, by specific contract) between the publishers and the songwriters; (c) a portion to "The Beatles" as Apple recording artists -- but *only* because they have a deal with Apple/EMI (Pete Best, et al, don't get a dime since they have no contract); (d) a portion to Paul, George and Ringo as individual artists contributing to the project (unless this was waived); (e) a portion to Yoko as John's heir and controller of his interests (and tapes); (f) a portion to any other song publisher whose numbers are included (i.e. Lenono, original owner of "FAAB"; and the publishers of "That'll Be The Day" -- which song is, in fact, owned by Paul McCartney!); and lastly (g) a portion to any third parties who happen to own material included in "Anthology 1" (i.e., whoever owns the Morecambe & Wise stuff).
No wonder they pay lawyers to follow all this!!!
>Who owns Apple?
Are its shares sold on the stock markets?
Apple, as far as I know, has never gone public. It is wholly owned by Paul, George, Ringo, and Yoko -- Yoko having, of course, inherited her portion from John.
(c) 2002 Paul Taylor Robertson. All Rights Reserved.