Apple Meets the Beatles? We'll Find Out Superbowl Sunday

I'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.

Comments

[Julian Ivan...:]

The Apple Corps vs Apple Inc appeal is due to be heard in the UK Court of Appeal on Feb 26/27. I can't imagine an announcement of this kind before that case is heard. I own AAPL stock too, but I have to say I view this as unlikely, even if very desirable.

2007 Jan 18 04:17 PM

[Tom B:]

Those greedy idiots are actually APPEALLING? Boggles the mind.

2007 Jan 19 08:41 AM

[Dan Poarch:]

It wouldn't surprise me if it wasn't another 1984-style ad to perk the consumer's ear for what's to come this year. Or maybe Steve Jobs will apologize publicly for taking big fat options grants. Yeah, better chance of Apple announcing a sell-out to Microsoft than seeing that.

2007 Jan 18 05:23 PM

[Tom B:]

I have already accepted Steve's aplogy on those options-- you should, too. Look what he's done for the company. As for a MSFT buy out-- in Ballmer's dreams!

2007 Jan 19 08:42 AM

[William OBrien:]

what commercial? where did this info come from I wonder.

2007 Feb 04 10:24 PM