Apple Corps

Apple Corps Ltd. is a multi-armed multimedia corporation founded in January 1968 by British rock band The Beatles to replace their earlier company (Beatles Ltd.) and to form a conglomerate. Its name (pronounced "apple core") is a pun. Its chief division is Apple Records, which was launched in the same year. Other divisions included Apple Electronics, Apple Films, Apple Publishing, and Apple Retail, whose most notable venture was the ill-fated Apple Boutique in London. Apple's headquarters, in the late-1960s, was at 3 Savile Row in London, known as the Apple Building, which was also home to the Apple Studio.

From 1970-2007, Apple's chief executive was former Beatles road manager Neil Aspinall though he did not bear that title officially. The current CEO is Jeff Jones.

History

Formation

The Beatles' accountants had informed the group that they had a large amount of capital which they could either invest in a business venture or else lose to the tax man. According to personal assistant to Beatles manager Brian Epstein, Peter Brown, activities to find tax shelters for the income The Beatles generated began as early as 1963-'64 when a Dr. Strach was put in charge of such operations. [Peter Brown and Steven Gaines, "The Love You Make: An Insider’s Story of The Beatles", 1983, McGraw-Hill Book Company, p. 117] First steps into that direction were the foundation of "Beatles, Ltd." and in early 1967 "Beatles and Co." which later evolved into "Apple".

John Lennon remembered it like this:

Writes Stefan Granados in "Those Were the Days: An Unofficial History of the "Beatles" Apple Organization 1967-2001" on the various processes that lead to the formation of Apple Corps:

Now that a new business structure was found with a lower tax rate, The Beatles's manager Epstein mused what to do with it in order to justify it to the authorities, and originally thought of it mostly as a merchandising company, as according to Lennon's first wife Cynthia: "The idea Brian came up with was a company called Apple. His idea was to plough their money into a chain of shops not unlike Woolworth's in concept - Apple boutiques, Apple posters, Apple records. Brian needed an outlet for his boundless energy." [Cynthia Lennon, "A Twist of Lennon"; 1978, reedited in 1990, Avon Books, ISBN 0-380-45450-5, p. 146] Personal assistant to Epstein, Alistair Taylor relates it a bit more in detail:

In the middle of setting up the new company, manager Epstein died unexpectedly in what seemed an accidental sleeping pills overdose on August 27th 1967, which put The Beatles even more in need of getting a hold of all their financial affairs for the first time, so Epstein's death accelerated all relating plans to achieve this end as soon as possible. In addition to providing an umbrella to cover the Beatles' own financial and business affairs, Apple was intended to provide a means of financial support to anyone in the wider world struggling to get 'worthwhile' artistic projects off the ground. According to Granados, this idea probably first originated with Paul McCartney as the Beatle most engaged in London's local avant-garde scene, "McCartney was among the best-known exponents of swinging London". [http://web.archive.org/web/20070829121144/www.cherryred.co.uk/books/thoseweretheday_txt.php]

McCartney at first had obviously intended to use Epstein's music publishing company NEMS Enterprises for these plans, but after Epstein's death it became apparent that Australian Robert Stigwood was trying to get hold of NEMS, only to control The Beatles and get a hand in their profits. None of The Beatles themselves favored such an outcome, as McCartney had previously told Epstein in 1967: "We said, 'In fact, if you do, if you somehow manage to pull this off, we can promise you one thing. We will record God Save the Queen for every single record we make from now on and we'll sing it out of tune. That's a promise. So if this guy buys us, that's what he's buying." [Paul McCartney, interview by Greil Marcus, March 01, 2000, quoted on [http://www.beatlemoney.com/paul6467.htm "Beatle Money: General statements"] ] They hurried to set up Apple instead, and seeing that The Beatles would not be part of the NEMS package, Stigwood went to form his own company, RSO Records.

By this time, also the company name originated with McCartney, coming from a René Magritte painting he'd acquired; 'Apple "Core" (Corps)' was a play on words all the Beatles enjoyed. The ubiquitous logo was designed by Gene Mahon, with illustrator Alan Aldridge transcribing the copyright notice to appear on record releases. John Lennon and McCartney introduced their new business concept on a press conference held on May 14th, 1968 in New York City:

McCartney pitched it to the world's media as an attempt at 'Western Communism': "A beautiful place where you can buy beautiful things… a controlled weirdness… a kind of Western communism." [ [http://www.newint.org/issue212/weirdness.htm "Uncontrolled weirdness"] , "New Internationalist", October 1990.]

Early Administration

With Epstein's death, there was nobody in the Beatles' inner circle with business acumen who could manage the company, and as with their band affairs, the Beatles decided that they would manage it themselves. Unfortunately, the band members' ignorance of finance and administration combined with their naive, utopian mission of funding struggling, unknown artists. The mail room, telephone switchboard, and conference rooms became jammed at all hours with "artists" begging the Beatles to give them money. George Harrison would later lament that "We had every freak in the world coming in there." Many of these supplicants received the investments they sought and were never heard from again.

The Beatles' naivety and inability to keep track of their own accounts was also eagerly exploited by the employees of Apple, many of whom had been hired in the same spirit of populist whimsy that drew applicants for the company's funds. Staff used Beatle money to purchase drugs and alcoholic beverages, company lunches at expensive London restaurants, and international calls made regularly on office telephones, all of which would be treated as business expenses. In essence, the Beatles had allowed themselves to be taken advantage of by anyone who could talk their way into the coffers.

Writers Alan Clayson and Spencer Leigh described the owners' hopelessness in managing their own creation:

Neil Aspinall finally agreed to direct the company on a temporary basis, simply so that someone would finally be in charge. When, in 1969, the Beatles engaged Allen Klein as their manager, Klein also inherited the chairmanship of Apple Corps, which led to an immediate streamlining of company affairs. "Overnight, glib lack of concern deferred to pointed questions," wrote Clayson & Leigh. "Which typist rings Canberra every afternoon? Why has so-and-so given himself a raise of 60 pounds a week? Why is he seen only on payday? Suddenly, lunch meant beans-on-toast in the office kitchen instead of Beluga caviar from Fortnum & Mason." [Clayson & Leigh, "The Walrus Was Ringo: 101 Beatles Myths Debunked", 2003 (p.257).]

Beatles breakup and beyond

The first two years of the company's existence also coincided with a marked worsening of the band members' relationships with each other, ultimately leading to the break-up of the band in 1970. Apple quickly slid into financial chaos, which was resolved only after many years of litigation. When the Beatles' partnership was dissolved in 1975, dissolution of Apple Corps was also considered, but it was decided to keep it going, while effectively retiring all its divisions. The company is currently headquartered at 27 Ovington Square, in London's prestigious Knightsbridge district. Ownership and control of the company remains with McCartney, Starr and the estates of Lennon and Harrison.

Apple Corps has had a long history of trademark disputes with Apple Computer (now Apple Inc.). The dispute was finally resolved in 2007, with Apple Corps transferring ownership of the "Apple" name to Apple Inc., and Apple Inc. licensing it back to The Beatles' company. In April 2007, Apple also settled a long running dispute with EMI and announced the retirement of chief executive Neil Aspinall. [Kozinn, Allan, "Magical Mystery Tour Ends for Apple Corps Executive", "New York Times", 12 April 2007, "passim". ( [http://www.nytimes.com/2007/04/12/arts/music/12beat.html link] )] Evans, Jonny, "EMI, Apple Corps deal good news for iTunes?", "Macworld", 12 April 2007 ( [http://www.macworld.co.uk/ipod-itunes/news/index.cfm?newsid=17737&pagtype=allchandate link] )] Aspinall was replaced by Jeff Jones. [cite web | url=http://www.nme.com/news/the-beatles/27612 | title=Beatles' friend quits top job at Apple Corps | accessdate=2007-04-10 | publisher="New Musical Express" | date=2007-04-10]

ubsidiaries

Apple Corps operated in various fields, mostly related to the music business, through a number of subsidiaries.

Apple Electronics

Apple Electronics was the electronics division of Apple Corps, founded as Fiftyshapes Ltd. and headed by Beatles associate Magic Alex, alias Yanni Alexis Mardas.

Intending to revolutionize the consumer electronics market, largely through products based on Magic Alex's unique and, as it turned out, commercially impractical, designs, the electronics division did not make any breakthroughs. Even a planned apple-shaped radio could not be produced at a competitive price, and was ultimately beaten out by Panasonic's 'ball and chain' radio.

After the dismissal of Magic Alex in 1969, during Allen Klein's 'housecleaning' of Apple Corps, Apple Electronics fell victim to the same forces that troubled the company as a whole, including the impending Beatles breakup.

While it did not make a dent in the marketplace, Apple Electronics was still considered a viable business entity years later, when Apple Corps and Apple Computer, now Apple Inc., went into litigation.

Apple Films

Apple Films was the film making division of Apple Corps. Its first production was the Beatles 1967 TV movie "Magical Mystery Tour", other notable releases included The Beatles' "Yellow Submarine", "Born To Boogie", Ringo Starr's 1972 documentary about the band T. Rex; "The Concert For Bangladesh" by George Harrison And Friends (1972); and "Son of Dracula", a 1974 horror-musical which teamed Starr with singer Harry Nilsson. George Harrison was the executive producer for the Apple Films "Little Malcolm and His Struggle Against the Eunuchs" that included the Dark Horse Records band Splinter's song Lonely Man.

Apple Publishing

Apple's music publishing arm predated even the record company. One of the first artists on its publishing roster was the group Grapefruit. Apple published the group's self-penned songs from early 1968, though Grapefruit's records were mostly released on RCA.

Apple Publishing Ltd was also used as a publishing stop-gap by George Harrison and Ringo Starr, as they sought to shift control of their own songs away from Northern Songs, in which their status was little more than paid writers. (Harrison later started Harrisongs, and Starr created Startling Music.)

Probably Apple's greatest publishing successes were the Badfinger hits "No Matter What", "Day After Day" and "Baby Blue", all written by group member Pete Ham, and Badfinger's "Without You", a song penned by Ham and Badfinger band mate Tom Evans. "Without You" became a worldwide #1 chart hit for Harry Nilsson in 1972 and Mariah Carey in 1993. In 2005, however, Apple lost the US publishing rights for the work of Ham and Evans. [Dan Matovina, Badfinger biographer and representative for the Ham and Evans estates ( [http://www.mindspring.com/~crimson3/BugDealAnnounce05.html link] )]

Apple also undertook publishing duties, at various times, for other Apple artists, including Yoko Ono, Billy Preston, Doris Troy, and the Radha Krsna Temple. Apple received a large number of demo tapes; some songs were published, some were issued on other labels and only Gallagher & Lyle were retained as in-house writers before going on to co-found McGuinness Flint. Many of these demos have been collected on a pair of Cherry Red CDs, entitled "94 Baker Street" and "An Apple for the Day".

Apple Records and Zapple Records

From 1968 onwards, new releases by the Beatles were issued by Apple Records, although the copyright remained with EMI, and Parlophone/Capitol catalogue numbers continued to be used. Apple releases of recordings by artists other than the Beatles, however, used a new set of numbers, and the copyrights were held mostly by Apple Corps Ltd. Unlike a mere 'vanity label', Apple Records developed an extremely eclectic roster of their own, releasing records by artists as diverse as Indian sitar guru Ravi Shankar, Welsh easy listening songstress Mary Hopkin, the power-pop band Badfinger, classical music composer John Tavener, soul singer Billy Preston, the Modern Jazz Quartet, and even London's Radha Krsna Temple. A short-lived subsidiary, Zapple Records, was intended to release spoken word and avant garde records, but folded after just two releases: Lennon's and Yoko Ono's "", and Harrison's "Electronic Sound".

Apple Retail

The Apple Boutique was a retail store, located at 94 Baker Street in London, England, and was one of the first business ventures by the fledgling Apple Corps. The store opened on December 7, 1967, and closed its doors for the last time on July 30, 1968. The boutique was never profitable, largely due to shoplifting. Perhaps bowing to this, the store's remaining stock was liquidated by giving it away.

Apple Studio

Apple Studio was a recording studio, located in the basement of the Apple Corps headquarters at 3 Savile Row.

Originally designed by Magic Alex of Apple Electronics, the initial installation proved to be unworkable, with almost no standard studio features such as a patch bay, or a talkback system between the studio and the control room, let alone Alex's promised innovations, and had to be scrapped. The Beatles recorded and filmed portions of their album "Let It Be" in the Apple Studio, with equipment borrowed from EMI, and during takes they had to shut down the building's central heating, also located in the basement, because the lack of soundproofing allowed the heating system to be heard in the studio.

Redesigning and rebuilding the basement to accommodate proper recording facilities took eighteen months, and necessitated ‘floating’ the townhouse; a difficult engineering task. The work was completed in 1970 and 1971, and the rebuilt studio, including its own natural echo chamber, offered a wide range of recording and mastering facilities, and could turn out mono, stereo and quadrophonic master tapes and discs. In 1971, it would have cost £37 an hour to record to 16 track, £29 an hour to mix to stereo, and £12 to cut a 12” master.

The studio became a second home for Apple Records artists, although they also used Abbey Road and other studios, and other artists such as Harry Nilsson, Wishbone Ash, Viv Stanshall, Lou Reizner, Clodagh Rodgers, Kilburn and the High Roads, the Sensational Alex Harvey Band, and Marc Bolan, as shown in the movie "Born To Boogie", also worked there. The existence of acetates by numerous performers is evidence the studio was widely used.

When the disbanded Beatles finally moved their offices away from Savile Row in the mid-1970s, the studio was closed permanently.

Legal battles with Apple Computer

In 1978, Apple Records filed suit against Apple Computer (now Apple Inc.) for trademark infringement. The suit was settled in 1981 with the payment of $80,000 to Apple Corps. As a condition of the settlement, Apple Computer agreed to stay out of the music business. A dispute subsequently arose in 1989 when Apple Corps sued, alleging that Apple Computer's machines' ability to play back MIDI music was a violation of the 1981 settlement agreement. In 1991 another settlement, of around $26.5 million, was reached. [ [http://news.com.com/Apple+vs.+Apple+Perfect+harmony/2100-1027_3-5378401.html news.com: Apple vs. Apple: Perfect harmony?] ] Transcript of full judgment in the 2006 case. "The Times", 8 May 2006 ( [http://www.timesonline.co.uk/article/0,,200-2170977,00.html] )] In September 2003 Apple Computer was again sued by Apple Corps, this time for introducing the iTunes Music Store and the iPod, which Apple Corps asserted was a violation of Apple's agreement not to distribute music. [ [http://www.legalzoom.com/articles/article_content/article11325.html legalzoom.com: Apple v Apple: What is at the core of The Beatles’ Apple Records vs. Apple iPod…] ] The trial opened on March 29, 2006 in the UK [ [http://news.bbc.co.uk/2/hi/entertainment/4854408.stm Apple giants do battle in court] ] and, in a judgment issued on May 8, 2006, Apple Corps lost the case. [Breaking news: "Apple Computer wins court battle with Beatles", Reuters, 8 May 2006 ( [http://today.reuters.com/business/newsarticle.aspx?type=ousiv&storyID=2006-05-08T095845Z_01_L08592117_RTRIDST_0_BUSINESSPRO-MEDIA-APPLE-JUDGMENT-DC.XML link] )] [Brandle, L. "Apple Computer Triumphs In Beatles Case", "Billboard", 8 May 2006 ( [http://www.billboard.com/bbcom/news/article_display.jsp?vnu_content_id=1002464164 link] )] Transcript of full judgement in the 2006 case. "The Times", 8 May 2006 ( [http://www.timesonline.co.uk/article/0,,200-2170977,00.html] )]

On 5 February 2007, Apple Inc. and Apple Corps announced a settlement of their trademark dispute under which Apple Inc. will own all of the trademarks related to “Apple” and will license certain of those trademarks back to Apple Corps for their continued use. The settlement ends the ongoing trademark lawsuit between the companies, with each party bearing its own legal costs, and Apple Inc. will continue using its name and logos on iTunes. The settlement includes terms that are confidential.Cite web|url=http://www.apple.com/pr/library/2007/02/05apple.html|title=Apple Inc. and The Beatles’ Apple Corps Ltd. Enter into New Agreement|accessdate=2008-05-10|publisher=Apple Inc.] Cite web|url=http://www.guardian.co.uk/media/2007/feb/05/digitalmedia.musicnews|title=Apple trademark dispute resolved|accessdate=2008-05-10|publisher=Guardian News|year=2007|author=Mark Sweney]

Apple versus EMI

The Beatles alleged in a 1979 lawsuit that EMI and Capitol had underpaid the band by more than £10.5 million. A settlement was reached in that case in 1989, which granted the band an increased royalty rate and required EMI and Capitol to follow more stringent auditing requirements. [http://news.bbc.co.uk/1/hi/entertainment/4535330.stm The Beatles and EMI’s court cases: bbc.co.uk 16 December 2005] Retrieved: 3 February 2007 ]

Apple, on behalf of the surviving Beatles and relatives of the band's late members, again sued EMI for unpaid royalties, in a case beginning in 2005. [ [http://www.timesonline.co.uk/article/0,,11069-2336456.html EMI court case, bbc.co.uk: 31 August 2006] Retrieved: 29 January 2007 ] [http://news.bbc.co.uk/1/hi/entertainment/4535330.stm The Beatles and EMI’s court cases: bbc.co.uk 16 December 2005] Retrieved: 3 February 2007 ] The case was settled in April 2007 with a "mutually acceptable" conclusion, but one that would remain confidential.

Bibliography

*DiLello, Richard (1973). "", Canongate Books Ltd. ISBN 1-84195-602-3.
*McCabe, Peter, and Robert D. Sconfeld "Apple to the core; the unmaking of the Beatles" ISBN 0671781723.
*Granados, Stefan. Those Were The Days, An Unofficial History of The Beatles APPLE Organization 1967-2002. ISBN 1-901447-12-X Cherry Red Books 2002

References

External links

* [http://www.applecorpsltd.com/ Official site] (Simply a placeholder)
* [http://www.rockmine.com/Beatles/BeatleCo.html Overview of Beatles companies]
* [http://www.cherryred.co.uk/books/thoseweretheday_txt.php Those Were The Days: The History of The Beatles Apple Organization 1967-2001]