Thursday, May 10, 2012

Tomorrow Never Knows: Don Draper Does the Math

I am a huge fan of "Mad Men".  I am also a huge Beatles fan and once I discovered that the show’s  trajectory was chronological,  I have been anticipating Don Draper's discovery of the Beatles.  While we have had nice little references in the past (Don buying his daughter Sally the latest Beatles’ record, Don trying unsuccessfully to meet the Rolling Stones to discuss a television commercial) nothing prepared me for the visceral excitement of watching and hearing Don drop the needle on "Tomorrow Never Knows".  Matthew Weiner got this exactly right.

                The next day we learned that the show paid approximately $250,000.00 for the synchronization license and master use license i.e. the right to use not just the song but the Beatles' original recording on the show.  Every music lawyer knows what a coup it was for the producers to get the master use rights as well as the synchronization rights to "Tomorrow Never Knows".  I thought it would be fun to guess what the various interested parties might have made on this deal.  Understand this is pure conjecture, based on traditional record company/publishing company economics.  The Beatles’ story is not traditional. The story of how Lennon and McCartney founded a publishing company, then lost it, only to see it end up in the hands of Michael Jackson and Sony has been reported many times (apparently most explicitly in a book called "Only a Northern Song" that I am still waiting to get my hands on).  Additionally,  everyone is aware of the fact that the years of litigation between the Beatles and EMI mean that the Beatles most assuredly do not have a traditional 50/50 split of license fee income with EMI…but assuming that they did –

                Then, one has to also assume that this deal involved the traditional split of 50/50 between master use license and synchronization license.  That is not always the case but it is a good rule of thumb.  Under this scenario the publisher of the song, Sony/ATV would receive $125,000 of which $62,500 would be paid in equal shares of $31,250 to Paul McCartney and the heirs of John Lennon (as an aside it looks as if Lennon's share of the copyright to the song was renewed in 1995 in the names of Yoko Ono, Sean Lennon and Julian Lennon).

                From the master use side, typically the label EMI (the parent company of Capitol) would split the master use fee 50/50 with the artist which means that it would pocket $62,500 and pay out approximately $15,625 to each of the Fabs or their heirs.

                Again, all this is mainly illustrative and is not meant to presume to know the intricacies of Apple's finances.  However if anyone knows more details about this deal please share.  In the interim, I  can wonder what Don Draper's reaction would have been had he heard the original "Anthology" version of "Tomorrow Never Knows" and what Don Draper, the ad man would have thought about paying $250,000 to use a song in a television show.

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