By Carl HoweI've speculated previously that Apple's (AAPL) introduction of the iPhone at last week's MacWord was just the start of many announcements to come this year. AppleInsider observes that Apple has picked up rights to air a Super Bowl commercial on February 4.. The rumor is that they'll use that commercial to announce an three-month exclusive deal to electronically distribute some Beatles music via the iTunes Store.
Now wearing my marketing hat, this raises a question: Does this ad buy make sense from an ROI point of view? Current Super Bowl ad rates are about $2.6 million for 30 seconds. Apple makes only about US$0.04 on each song sold via iTunes. So it would have to sell about 65 million Beatles tracks during that limited three-month period to break even on the commercial time, to say nothing of the cost of the ad production. And even if it were to sell 100 million Beatles tracks, that would only make Apple $1.4 million or so. So the open question becomes, "Might there be more in an Apple Super Bowl ad than just the Beatles announcement?"
My call: Assuming it was able to negotiate the rights, Apple will probably announce a Beatles-themed iPod to bundle with the Beatles music, just as it did with the U2 iPods. And given that Apple just talked down iPod projections for the first quarter, that would be a smart way to boost sales during this traditionally slow period -- and again surpass analyst projections.
The Fab Four, with a little help from their friends at Apple
In my more speculative moments, I wonder whether even that is big enough for a Super Bowl ad. Apple has been sparing in its use of Super Bowl ad spots, usually (but not always) reserving them for times when it wants to announce something really big, starting with the Ridley Scott only-ever-shown-once-on-TV 1984 Macintosh ad. A Beatles iPod that had all the sexy wide-screen and touch-screen goodness of an iPhone without the phone functions would certainly fit that bill, but I don't think Apple would be willing to confuse the market quite this soon after the iPhone introduction. Regardless, my bet is that the Super Bowl ad is about more than just adding the Beatles catalog to iTunes.
Full disclosure: I own Apple shares.