Tomorrow never knows

Beatles/iTunes: The Beatles may have been more popular than Jesus. But you can’t currently log onto Apple’s iTunes store to buy their music for your Jesus phone. That looks set to change. The Fab Four’s albums are finally to be sold online, according to a report in the Wall Street Journal. The long dispute irritated fans, and cost label EMI and Apple revenue.

An agreement between EMI and Apple has appeared to be close several times over the past three years. But the two sides could never come to terms. This was mildly unfortunate for Apple and Steve Jobs, who professes to love the band. The company essentially runs iTunes on a break-even basis, and uses its vast selection of music, movies and software as a way to attract users to buy its gadgets. The lack of the Beatles’ songs was a big hole in its extensive offerings.

Fans suffered more. Not being able to buy their music online seemed a bit quirky when the iTunes store debuted seven years ago. It has turned into a real hassle considering how many record shops have closed.

Yet it is EMI that has suffered most in the stand-off. Apple accounts for 70 per cent of all paid music downloads according to research outfit NPD. Moreover, digital sales now account for about 40 per cent of all album and single sales. True, online sales aren’t as profitable as physical sales, but Beatles fans have shown themselves willing to buy new versions of old songs. So EMI probably passed up additional sales.

That’s unfortunate for private equity owner Terra Firma, because the firm is suffocating under a heavy debt load.

Terra Firma tried to blame this misfortune on illegal wrongdoings by Citigroup - the bank was cleared in court - instead of its own poor understanding of the effects of the digital shift on the music industry. The long-delayed appearance on iTunes will aid EMI’s sales, perhaps substantially. Whether this comes too late to help Terra Firma in restructuring talks with main creditor Citigroup is a better question.