Sony strikes distribution deal for Beatles memorabilia
Will be North American purveyor of British rock band’s merchandise
Sony Music Entertainment has signed an agreement to be the exclusive North American purveyor of Beatles T-shirts and other memorabilia, according to people familiar with the matter, the latest sign of the increasing importance of such sales for musicians and record companies.
The deal—terms of which weren’t disclosed—comes as the Sony Corp. unit is working to expand its presence in the growing music merchandising market with its Thread Shop division. Merchandise has recently represented an expanding share of artists’ business and music companies are increasingly taking part in what used to be regarded as a relatively minor part of the industry.
Sony planned to send out invites Wednesday for a pop-up store due to open next week in New York City that is set to showcase new apparel designs, toys and other Beatles-branded products, including turntables and a pinball machine.
The Beatles’ North American merchandise license had been held since 2013 by Bravado, a subsidiary of Vivendi SA’s Universal Music Group. Bravado, the dominant player in the market, has around $300 million in annual revenue.
Sony and Universal are both deeply involved in other parts of the Beatles’ business. Universal owns the group’s recorded-music catalog and serves as its record company worldwide. Sony controls the publishing rights to hundreds of the band’s original songs through Sony/ATV Music Publishing.
Under the agreement, Thread Shop will work with Apple Corps Ltd., the band’s Londonbased corporate entity, to expand the Beatles’ brand in the U.S. by developing apparel and other products and partnerships. Stores slated to carry the new merchandise include Target, Forever 21, FYE and Hot Topic. Thread Shop will also operate the group’s North American retail site.
Distributing Beatles merchandise has historically been a relatively low-margin business because the band is able to command high royalty rates, according to a person familiar with the matter.
But working with the band could help Sony attract other major artists to its growing merchandising efforts.
In August, Thread Shop acquired the merchandise division of theatrical-production company Araca Group, gaining a roster of artists including Led Zeppelin, Pink, Shania Twain and Sugarland.
That deal followed acquisitions within the past year by Sony Music’s two biggest rivals. In January, Universal bought Los Angeles-based merchandise company Epic Rights, which has worked with Kiss, Def Leppard, AC/DC, Aerosmith, Madonna and Celine Dion.
In September 2018, Access Industries Inc.’s Warner Music Group struck a $180 million deal for online entertainment merchandise retailer E.M.P.
Merchandising Handelsgesellschaft mbH, which offers merchandise from artists including Metallica, Nirvana, Guns N’ Roses and Pink Floyd.
The sale of branded merchandise—from sweatshirts and Tshirts to fanny packs and beanies—has become an increasingly important business for many artists in recent years.
As sales of recorded music decline, replaced by less-profitable streaming, artists have looked to fill the revenue shortfall with touring and merchandise sales. With rising demand for such novelties, artists have been tying the sale of a CD or digital download to those items in an effort to boost their position on the Billboard 200 album chart. Those so-called bundles have led to what some in the industry call skewed chart results by reflecting fans’ desire for memorabilia rather than for an album.
Billboard last week introduced new rules to rein in the impact of those bundles— which have led to hotly contested weeks on the chart—and is in the process of developing a new chart to measure merchandise sales alone.