What Beatles' Streaming Decision Means for Music Industry

Former Warner Bros. digital-music executive calls move a "giant validation of streaming"

Insiders see the arrival of the Beatles catalog on Spotify and similar services as a major victory for the streaming movement. Credit: Michael Ochs Archives/Getty

Now that the Beatles have announced they'll activate their famous catalog on every on-demand streaming service, from Spotify to Apple Music, as of midnight on December 24th, the record business has one overwhelming reaction: What took them so long? "It's surprising they didn't do it this time last year," says Terry McBride, manager of Father John Misty, fun. and many others. "They probably have lost 10s of millions of dollars by not doing it. I'm quite sure there are many people, maybe in the millions, who are Beatles fans that have not been listening to the Beatles. That's a huge lost opportunity on so many levels."

Over the past few years, the record business has shifted its model from selling CDs and downloads to streaming — revenue from Spotify, YouTube and the others jumped from less than $600 million in 2012 to nearly $1.1 billion in 2014, according to the Recording Industry Association of America. Numerous artists, including Radiohead's Thom Yorke and Joanna Newsom, have complained about the low royalty payments they receive from streaming, and Taylor Swift and Adele have withheld their blockbuster albums from the services during the past two years. But the Beatles' presence gives the business what Jack Isquith, a Slacker Radio senior vice president and former Warner Bros. Records digital-music executive, calls a "giant validation of streaming.

"How do you look at this from a business perspective and say the other ups and downs over streaming — the Taylor Swift stuff, the Adele stuff — don't wind up as footnotes in history once you have these 13 [Beatles] albums right down the middle?" he continues. "This is an acknowledgment that streaming isn't just the future; it's the present."

The Beatles, who wouldn't comment for this story, have a history of waiting out new technology until they're absolutely certain it works for them. The compact disc came out in the early Eighties, but Beatles albums didn't arrive via CD until 1987; the iTunes Music Store opened in 2003, but the Beatles didn't sell downloads until making a 2010 deal with Apple. But their timing always seems right. "It is absolutely the perfect moment," says Alex Luke, a venture capitalist and former music executive for Apple as well as the Beatles' longtime label, EMI. "Digital-music services boom on Christmas Day and the week after, due to the new hardware under the Christmas tree — the iPads and phones and laptops. You have everyone hitting the digital services en masse. They picked the perfect window to maximize the return."