Michael Jackson, Northern Songs and Itunes

Someone asked me last night if the Michael Jackson Estate would profit from the Beatles deal with iTunes.  Apparently there have been rumors that Jackson's Estate would not profit.  Let's do a little history lesson, so everyone is up to speed.

First, we need to understand that the Michael Jackson estate owns the publishing rights to the majority of Beatles songs.  "The chief benefit to owning the publishing rights of songs is that the standard publishing agreements call for royalties to be split 50-50 between the publisher and the songwriter(s), so owning the publishing rights to popular songs can be a lucrative form of income."  In this case, the songwriters (for the most part) are Paul McCartney and John Lennon, and the owner of the publishing rights are the Jackson estate and Sony. 

Northern Songs

In 1963, the Beatles assigned their publishing rights to a company called Northern Songs.  They did so because they were earning so much money in songwriter rights, that their publishing rights were being eaten by taxes.  Northern Songs passed hands a few times until Michael Jackson bought them in 1985 for a reported $47.5 million.  In 1995, Jackson merged the Northern Songs with Sony's ATV catalog, to form Sony/ATV publishing.  A more detailed explanation of the entire history of the Northern Songs, along with publishing rights is available from the link above.  So we now know that the publishing rights in a standard deal gives Sony and the Jackson Estate a 50% profit for the majority of Beatles songs, albums and box sets that are sold on iTunes.  Sony receives 25% and the Jackson estate receives 25%.

Beatles/Itunes Deal

iTunes began selling Beatles songs on November 16, 2010.  In the first week alone, iTunes sold an unprecedented 2 million single songs and 450,000 albums by the Beatles.  In January, 2011, the Apple Insider announced that in two months, iTunes had sold 5 million single songs and 1 million albums. 

A New York Times article states that "terms of the deal were not disclosed, but in standard agreements with Apple a label collects approximately 70 percent of the sale price, and pays royalties out of that share.  One beneficiary of Beatles would be the Michael Jackson estate, which owns half of the Sony/ATV catalog, the publisher of most Beatles songs; the publisher would most likely collect about 9 cents on each song." 

So if we took a look at just the first two months of Beatles individual song sales (excluding albums), the total is 5 million.  If we multiply that by $.09, the total is $500,000.  One half goes to Sony ($225K) and the other half goes to the MJ Estate, another $225K.  This is just in two months and does not include albums or boxset publishing royalties. 

Most importantly, is this Rolling Stone article entitled, "Beatles Deal Most Lucrative in iTunes History".  In this particular deal, iTunes pays the Beatles and Sony ATV Publishing (MJ estate included) directly, and eliminates a middle man.  This is the opposite of a standard deal with Apple.  "If this is the case, the deal functionally acts as a licensing agreement as opposed to a standard digital retail sale, which would split royalties between the Beatles and Sony/ATV Music, significantly more lucrative than the traditional 20-25% “superstar” rate.

Of course, we are not working with absolutes here regarding profit revenue for the Jackson estate.  But it is safe to say that the Jackson estate IS making a hefty profit from the Beatles/iTunes deal. 

Light-A-Candle

Tonight I went to the online site Gratefulness.org to light a candle for Aaron.  After I lit it, I noticed that there were a number of candles lit for "MJ".  I decided to click on them, to see who these candles were lit for.  Here are a few of the things people had to say: 

From Italy: A star never dies

From Germany: Thank God for this *ANGEL*.  Michael has shown us what is about humanity, please protect him and his wonderful children.

Messages from all over the world pour out in grief for the loss of Michael Jackson from this world.  We love you Michael, and we wish you were here with us. 

We Are The Bridge

Mother's Day will be hard this year without Aaron.  The phone will not ring on Sunday.  A good friend of mine from the MJ fam sent me a book that has daily meditations to work through grief.  I wanted to post yesterday's entry in the book, it is for Aaron, and for all of you who have lost a loved one.  It is especially for a MJ fam member who recently lost her son.  Although this entry was written by a woman who lost her daughter, it is poignant and near to my heart.

"They are everywhere -- the reminders of our loss. The ricochet off one another, fill the empty spaces of our lives.

My granddaughter comes to visit.  She is just the age -- my daughter was when she was a flower girl in my sister's wedding.  I have saved the dress.  It fits my dark-haired granddaughter as it my my dark-haired daughter.  My granddaughter tries it on, turns this way and that in front of the mirror.  'I like it', she says.  It is hers.

My daughter lived more than a dozen years after she wore that dress.  And yet...the dress calls back not only the delight we all took in that wedding, but the death years later of the one who wore the dress.

Later in the visit, I read to this small, wonderful child a story that had been a favorite of my daughter's.  Behind my voice I hear my daughter's voice at two and a half, anticipating the words as we turned each page.  The reminder is a shadow.  It is also sunlight -- wonderful, giving sunlight -- that this precious child whom my daughter never saw delights in her dress and her storybook, and that I am a bridge between these two." 

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This applies to my life, because I will have to remind those who come after Aaron of who he was.  But it is also a reminder to the MJ fam that we will have to do the same thing for Michael Jackson.  We are the bridge between those who don't know Michael.  We are, the bridge. 

Branding and the Marketing of Dead Celebrities

The announcement of the partnership between Pepsi and the Michael Jackson Estate to celebrate the 25th anniversary of Jackson's Bad album has met with mixed reviews from the media. In particular, Roger Friedman wrote a short piece for Forbes where he questioned whether it was appropriate to partner with Pepsi. Friedman questions the suitability of the partnership considering Jackson's burn accident, incurred while filming a Pepsi commercial in 1984, stating that it's "generally thought that his plastic surgery and painkiller addictions can be traced to that event."

Friedman has been around long enough to understand that marketing dead celebrities is nothing new. Pepsi has partnered with several dead celebrities, including the Elvis Presley estate, marking the 30th anniversary of his death. Is it reasonable to believe that the consumer would look at that Pepsi can and remember the condition Presley was in at the time of death? Does an image of an obese Elvis, who could not remember his own lyrics due to years of administration of polypharmacy, which ultimately caused his untimely death, come to mind when cracking open a can of Pepsi?

Pepsi obviously banked on the marketability of long-term appeal of both Presley and Jackson. Perhaps Pepsi is hinging their decision on some of Jackson's remarkable achievements during the Bad world tour, including selling out seven shows at Wembley Stadium in London, with over 504,000 people and breaking a world record for attendance. Pepsi may be relying on older fans to remember that the Bad tour was the largest tour in history, entering the Guinness Book of World Records several times or the amount of money Jackson donated to charity during the tour. More than likely though, the target is a new generation of fans, who over time could invest money in both Pepsi and the Jackson's music.

No matter what the demographic target is for Pepsi with Jackson's silhouette on its can, the goal is to pierce the new generation's consciousness with images of stadiums overflowing with screaming fans, women and men alike crying at just the sight of the entertainer on stage. The concept is that as soon as the consumer sees Jackson's image, or hears a Jackson song, that positive images of Jackson come to mind. This approach is called branding, and is not limited to celebrities, but can be used for anything you can think of. For example, when most people think of Disneyworld, they think of the happiest place on earth with wholesome fun and values. Part of that appeal is due to advertising that promoted Super Bowl winners ("We're going to Disneyland!) or to their 10 year tie to McDonalds. The majority of consumers do not associate Disneyworld with deaths that have occurred on their rides, the downfall of CEO Michael Eisner or the French people's condemnation of EuroDisney when it first opened.

The same can be true for a celebrity. To be clear, the celebrity should still be viewed for their contributions to their art, to society in general and to endorsements inked while they were alive. In Jackson's case, the estate executors have remained steadfast regarding what products to endorse. Jackson had a working relationship with Pepsi spanning nearly a quarter of a century. Jeff Jampol, who controls the Janis Joplin estate and consults with the Jackson estate, states "We practice the Hippocratic Oath of rock, which is, 'First, do no harm.' In my eyes, these artists lived and died for their legacies, and their legacies belong to them - not movie directors, not record labels and not book publishers." The estate executors and consultants realize that Jackson's legacy is of the utmost importance. The celebration of BAD's 25th anniversary coupled with a huge advertising campaign seems to suit both Jackson's legacy and the estate's profitability bottom line like a sparkly white glove.