Why The Beatles Needed Digital Streaming to Maintain Their Brand

Got to go where the young folks are

The Beatles' shareholders—Universal Music Group, mainly, nowadays—could no longer believe in yesterday when it comes to the online distribution of pop music's most iconic brand.

On Wednesday, UMG revealed that The Beatles are going where the kids are—online streaming services—while partnering with nine of such entities, including Spotify, Apple Music, Google Play, Amazon Prime, Slacker, Tidal, Groove, Rhapsody and Deezer. The group's classic songs will begin rolling out on the apps and websites on Christmas Eve. 

"It was an inevitability for UMG to release their Beatles library for streaming services strictly from a brand perspective," said Adam Padilla, CEO of BrandFire. "How could they be perceived as the company that is holding back some of the best music in modern history from the generation with the power to proliferate it?"

Aaron Goldman, CMO at 4C, added, "Putting aside the issues of monetization and intellectual property, streaming is the best way to reach a new young audience and ensure the Beatles music endures for future generations." 

There's going to be a big discovery component with millennials that will benefit from having The Beatles streamed, predicted Charles Alexander, whose Nashville-based company Streaming Promotions does marketing and management in the music industry. 

"It's not that millennials don't know who The Beatles are, but as time goes on, and the majority of music is consumed through streaming platforms like Spotify, then I think that play is obvious," he said. "If you're going to build your audience and build The Beatles brand—not that they need to anymore—but if they want to build new fans then Spotify makes a whole lot of sense."

John Strohm, a music industry lawyer who primarily represents music artists, said the announcement could end up helping music apps like Spotify and Pandora scale their businesses even further. The Beatles were a "major hold out" to streaming, Strohm said, and it wasn't even until recently that they were available on iTunes. 

"It's a really interesting time for music because I think everybody more or less agrees, certainly everyone I talk to in the industry agrees, that the era we're heading into will be primarily about digital streaming," he said. "It just makes sense."

The Beatles' digital entry could also impact the other end of the age spectrum, possibly introducing an older audience to streaming music for the first time, said Scott Register, a radio host on Birmingham Mountain Radio, an independent music radio station in Alabama.  This could "be the key to opening that gate," he said.

"It's the nature of the beast these days," Register said. "It's the newest way of consuming music, and for some people it's the way they listen to it and you've got to give people what they want. The Beatles are The Beatles, man. Everyone wants to listen to The Beatles."

Strohm said the lack of digital distribution likely left a lot of Beatles money on the table.

"This is a performance-based way of compensating the rights holders, and the music we love the most and the music we listen to the most makes the most money," he said. 

Indeed, while the vinyl records revival of the last few years has probably been good to Beatles album sales, there's absolutely no way those dollars have made up for the legendary band's decreases in compact disc revenues—a challenge the entire music industry is facing. 

"If young people don't adopt The Beatles as their own, on their terms and on their devices, what was once a prized commodity rapidly becomes a relic," Padilla of BrandFire said. 

In fact, while today's move may have given The Beatles new digital life, the development could also be viewed as a symbol of the compact disc's demise.

"It's not the last breaths," said Josh Jackson, founder of lifestyle online publisher Paste. "It takes a while for old technology to truly die—just ask AOL about dial-up customers. But this was the first year that streaming revenue eclipsed CD sales, and a lot of the CDs that are still selling are legacy artists. So this is a huge turning point for streaming to have The Beatles available everywhere."

@Chris_Heine Christopher Heine is a New York-based editor and writer.
@martyswant martin.swant@adweek.com Marty Swant is a former technology staff writer for Adweek.