Lessons from The Beatles

The Beatles remain one of the most popular bands of all time. After the death of their manager Brian Epstein in 1967, the band decided they would self-manage themselves, which led to a 21-month period of chaos that ultimately led to the band's breakup. The article written by David Philp, a music business professor at William Paterson University, titled Magical Mystery Tour: Failures From The Beatles’ Self-Managed Era and Lessons for Today’s DIY Musicians describes these tumultuous times for The Beatles, as well as lessons to be learned from them.

The Job of a Personal Manager

The main job of a personal manager for an artist is to be responsible for every aspect of the artist's career, all the time, according to Profs. Stephen Marcone and David Philp in their book, Managing Your Band, 5th Ed. With this responsibility, it is necessary for the manager and the artist to develop a respectful relationship with each other.

Magical Mystery Mistakes

After the death of their manager Brian Epstein, The Beatles decided to continue their business affairs themselves (in other words, they became a DIY group). Paul McCartney pitched this idea to self-script, produce, and edit an hour-long TV film accompanied with a soundtrack called The Magical Mystery Tour, in which the band was filmed riding a bus through the English countryside with several odd characters. There were several mistakes made in the process. First, the band didn't trust experts to help and did it all themselves, which did not work: there wasn't a complete script, the production was lacking, and none of them had the editing skills to edit the film well. Second, no one booked any film studio time to record interior scenes for the film. Third, the band was na?ve about their abilities: they budgeted a mere 4 weeks for filming and editing, but it took a total of 11 weeks to finish the project. Fourth, although the movie was shot in vivid, psychadelic colors, no one checked with BBC about how it would air. It ended up airing in black and white, rendering all the time and money spent on making the colors pop pointless. In the end, the film received poor reviews, and NBC decided to cancel the deal to broadcast it in America. These problems may have been avoided if The Beatles had a manager calling the shots: in fact, Beatle employee Neil Aspinall said, "If Brian [Epstein] had been alive, the film never would have gone out... Brian never would have let it all happen." They were lucky that the soundtrack did well in the U.S., earning $8M in the first 10 days of release.

Apple Corps. and its Pitfalls

The original reason for the incorporation of Apple Corps. was to protect The Beatles from being taxed individually (instead, they would pay corporate taxes), and "to comprise various divisions in which the Beatles could claim some experience." However, instead of protecting their money, Apple Corps. wasted their money: they would invest money in any pitched business idea that the band "felt right" about. They would hire people to run each division of Apple who would "[spend] wildly on lavish lunches, drugs, international (personal) phone calls, and opulent office furniture," even though each Beatle could spend for his personal habits and write off the costs to Apple. Essentially, they naively gave their money away under the guise of Apple. Beatles biographer Hunter Davies wrote, "Millions of pounds were thrown away on daft schemes, shops, businesses, pandering to eccentric notions, and strange people." It was such a chaotic money-bleed that it closed within 8 months.

Publishing Challenges

Another mistake that the band made was that they were completely hands-off with all of their agreements, including in publishing. As a result, Paul McCartney and John Lennon were under the impression that they owned the whole of their publishing, when in reality, they owned 20 shares. Upon realizing this, Lennon and McCartney sought to renegotiate their ownership with Dick James (head of Northern Songs, the publishing company that owned the majority stake in their songs), which didn't go well and led to James selling their publishing to ATV Music—without giving Lennon and McCartney the opportunity to buy off the share that was sold. The songwriters ultimately sold out to ATV for $5.738M. This is a clear lesson to be learned about reading your contracts and knowing the rights that you sign away, because oversights could be costly.

Contract Issues with the New Manager

Allen Klein became The Beatles' new manager in May of 1969. However, the transition was not smooth due to contract disagreements. According to Prof. Philp's article, "Klein wanted 20% of an increased royalty rate should he be able to negotiate a new deal with Beatles record company EMI (not 20% of the full rate, just 20% of the increase over the previous rate). He would also claim 10% of Apple Records label gross income." Ringo Starr took issue because Klein could earn commission from two sources, because he would take both the 20% of his increased royalty and the 10% of Apple Records income. Although The Beatles' attorney Peter Howard assured them that each party agreed verbally that the Beatles’ royalties would not be a part of Apple Records’ income, Klein was sued for taking the two commissions later on after the band broke up. McCartney also took issue with the contract. He believed that Klein should only take a 15% royalty because they were so popular. However, Klein only needed to get the other three Beatles to sign, since only three signatures were needed (the band operated as a corporation), so McCartney's concerns were overlooked.

5 Lessons to be Learned

There are several lessons that a DIY artist or manager can learn from The Beatles' mistakes. Here are 5 that are useful to know:

1. Become educated.The Beatles made many na?ve decisions, such as signing contracts without reading them or consulting a lawyer, and placing too much trust in Brian Epstein, who made some mistakes himself. They also started a company without knowing how to run it, and ended up losing a large amount of money from it. It's extremely important for a DIY artist or manager to know what they are getting involved in with any partnership, so making sure to read their contracts and being familiar with their money flow is imperative.
2. Have patience. One example of the band's impatience ultimately coming back to haunt them was when they signed the management contract with Allen Klein. McCartney wanted more time for his lawyer to look it over and help renegotiate, but Lennon's hastiness led to the group signing a contract that didn't serve them as a team. McCartney ended up suing the other three members of the band and Klein within a year to dissolve the partnership. Also, Apple Corps. ultimately sued Klein on behalf of Lennon, Starr, and Harrison, who lost the most in the settlement due to their hastiness to sign.
3. Create a thorough band agreement, and understand each other. These two lessons go hand-in-hand. The first is to create a band agreement with your other band members (if any). This agreement is meant to be thorough enough to address any potential future problems before they become problems. With this also comes an understanding as a group: what are the goals of the group? where do we want this group to be in 5 years? 10 years? Everyone in the band needs to always be on the same page in order to avoid future agonizing complications. The Beatles didn't do this, and it ultimately drove them apart from each other: although the band started on the same page, each member developed different interests and aspirations, leading to major disagreements and their breakup later in their career.
4. Shop around for guidance, then listen to the advice. The Beatles were offered advice from many people, warning them against their Apple Corps. ventures as well as their signing with Allen Klein. Clearly, they didn't listen, and it cost them greatly. The lesson here is to take into account the advice of other people in the field to make the most informed decision on important matters. Had the band listened, they may not have lost so much money, and they may not have eventually broke up.
5. Work with surrounding talent. The Beatles, due to their egos, unfortunately passed up opportunities to work with some incredible artists, including Jimi Hendrix, Cream, The Bee Gees, and more. Their egos drove away potential business with powerful people that could have earned their record company large sums, and they lost out. Had they set their opinions aside, deals could have been made, and tons of revenue could have resulted. This lesson is important because a DIY artist or manager should welcome opportunities like these to work with other talent.

The Beatles' Breakup

Ultimately, The Beatles' self-managed period led to their breakup. This was largely due to their lack of understanding about the business side of the music industry, and their unwillingness to educate themselves about it. They ran their company Apple Corps. into the ground since they did not how to be good businessmen. They hastily signed contracts without thoroughly reading and understanding them, and lost out on great revenue because of it. They also all lost sight of the band's goals and were very disjointed in the end because of the lack of clear band direction. If The Beatles had taken the time to learn how to manage themselves early on, they may not have made so many mistakes that eventually led to their demise.

Gwynne Stevenson is a senior at William Paterson University pursuing a B.A. in Popular Music with minors in Music & Entertainment Industry Studies and Classical Voice. She is involved as President of the university's student-run Music & Entertainment Organization, and is also a sister of Theta Phi Alpha Women's Fraternity. She is aspiring for a career in the live music industry upon graduation.