Some suppliers are tough to crack

16 November 2010
Lindsay Clark, international news editor, Supply ManagementThey have something you need and while you can’t agree to pay the earth for their goods, your company’s offering is somehow incomplete without them. So it was with iTunes, Apple’s digital music distribution service. Despite its commanding position in the market, it lacked one key product – The Beatles. Now that looks likely to change, as rumours are rife today that the remaining group members, and the widows of John Lennon and George Harrison, have agreed to put their music out there, online. That the Beatles were able to hold out for so long is down to key factors early in the group’s career. Not only did John and Paul write their many hits, they also owned the publishing company, Northern Songs, which owned the rights to their music. So intellectual property ownership is vital. This is coupled with two other key factors in accomplishing a strong negotiating position. One, the group had incredible market share during its early career, at one point said to be outselling, not just the most popular US groups, but all US groups put together. Secondly, longevity: The Beatles are continually referenced by other artists, which makes younger generations seek out their tunes. But all suppliers have their weak points. The Beatles’ was that their grip on their music was beginning to weaken. Copyright runs out after 50 years, and 2012 marks the 50th anniversary of their first single, Love Me Do. Despite this, I’ve a sneaking suspicion this supplier may be singing all the way to the bank.
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