According to industry sources, iTunes is paying the Beatles’ royalties from digital download sales in the United States directly to the band’s company, Apple Corps, and is paying the songwriting mechanical royalties directly to Sony/ATV Music Publishing, which controls most of the Beatles’ song catalog.
Under a standard contract, a label issues an album, licenses the songs from music publishers, collects all wholesale revenue from the retailers and then distributes royalties to the artist and the publisher.
For superstar artists, the royalty typically equals about 20%-25% of retail revenue. So in the case of iTunes’ Beatles sales, where tracks are sold to the merchant for about 90 cents and are retailed for $1.29, a standard contract with a typical superstar royalty rate of 20%-25% would pay the Beatles about 18 cents to 22.5 cents per track sale.
But because iTunes is making royalty payments to the Beatles and Sony/ATV, EMI may be treating its deal with the digital retailer as a licensing pact.