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Stupid Business Decisions: Decca Records Snubs The Beatles


One British record executive thought the group had "no future."

"Not to mince words, Mr. Epstein, but we don't like your boys' sound. Groups are out; four-piece groups with guitars particularly are finished…The Beatles have no future in show business."
-- Decca Records Executive, 1962

On January 1, 1962, Paul McCartney, John Lennon, George Harrison, and Pete Best attended a one-hour audition at Decca Studios in West Hampstead, London. After performing a 15-song set selected by their manager, Brian Epstein, The Beatles were told that they would hear the label's decision within a few weeks.

A short while after that, to the dismay of the Beatles' members, Decca Records rejected the band on the notion that they believed four-piece guitar groups were finished. And The Beatles were not alone. Future British heavyweights The Yardbirds and Manfred Mann suffered the same fate after their Decca tryouts.

Forty-plus years later we look back on this incident as one of the biggest business blunders of all time. In 1962 Decca Records was one of two titans in the British music industry, having acquired world-renowned artists Louis Armstrong, Count Basie, Billie Holliday, Judy Garland, and Bing Crosby.

Decca flaunts an exceptional résumé currently and historically, but the "no" heard round the world still phantoms the company's history as well as its potential wallet width. Its loss with The Beatles was a gain, though, for EMI Records, Britain's other music powerhouse circa 1960. EMI producer George Martin contacted Brian Epstein after hearing the Decca audition tapes and said he wanted to sign the boys. The rest is a rich and affluent history.

How affluent?

The site has weeded through hundreds of books on Beatles history to narrow in on precise monetary figures relevant to the group's economic production. Some of these numbers are enough to make any departed Decca executive roll in their grave.

For instance, by the end of 1963 (almost two years after the Decca audition) the band had acquired more than 80,000 dues-paying members in the Official Beatles Fan Club and had thousands of applications set aside for review. As popularity promotes numbers, fiscally it's more the merrier.

And in 1964, the Wall Street Journal predicted that by the end of the year, the Beatles would have sold $50 million in records in the US alone. By 1969, The Beatles had earned a total of £1,708,000 (about US $4 million), a fortune that grew to £9,350,000 (US $22.3 million) through 1971.

Needless to say EMI reaped substantial benefits, while Decca sat idle, pondering its gaffe.

EMI's ownership of The Beatles was an everlasting cash current. Even when the group ventured to release records on its "own" Apple label, EMI held solid control of the benefits from every release. EMI distributed Apple records until 1975, and retained all ownership of The Beatles' recordings throughout. (In 2005 the surviving Beatles and relatives sued EMI for royalties worth an alleged £30m)

Beatlemania went over the hill last decade, marking the 40-year mark since its inception, but its money reign is far from over:

  • In November 2000, Capitol (a subsidiary to EMI) released The Beatles' hits compilation, 1, which sold 11.5 million overall last decade, awarding it as the bestselling album of the 2000s.

  • In 2006, Las Vegas got a little taste of Beatlemania when Cirque De Soleil fashioned a show around Beatles music titled, "Love." The soundtrack earned the producers two Grammy Awards in 2009.

  • In 2007, Forbes magazine's "Top-Earning Dead Celebrities" list placed John Lennon in the number-two spot with yearly earnings estimated at $44 million. George Harrison, who passed away in 2001, ranks number four on the list at $22 million earnings estimated. That same year, Sir Paul McCartney took the third spot in the music industry rich list, compiled by The Times of London, with a £725 million fortune (US $1.4 billion).

  • On September 9, 2009, a digitally re-mastered catalog of Beatles music was made available in North America, Japan, and the United Kingdom. During the first five days of release, more than 2.25 million copies were sold. Though they're still at a standstill with Apple (AAPL) to release their albums on iTunes, the group seems unaffected by the lack of digital distribution and triumphant distributing their music the old-fashioned way -- through record shops.

  • Also in 2009, The Beatles released a selected catalog to MTV Games (VIA) and Electronic Arts (ERTS) for The Beatles: Rock Band video game. Though an argument lingers based on whether sales lived up to overall predictions, the game still sold about 650,000 units worldwide in its opening week.

So even in spite of Michael Jackson's purchase of the 250-song Beatles catalog in 1985 and the recent Abbey Road Studios predicament, the surviving Beatles and the estates of George Harrison and John Lennon are carrying out just fine.

Decca isn't hurting too badly, either. Just after its notorious shy eye to the Beatles, reverse karma came their way with a tip from Beatles' guitarist George Harrison. Approaching Decca representitives at a music competition, Harrison hinted that there was another foursome on the scene that it should look into. The executives went to see The Rollin' Stones at a club and signed them right away. Adjusting the moniker to The Rolling Stones, Decca enjoyed their contributions until 1970, when the group's contract expired and they went on to create their own company.

With both British and American studios now under the Universal (VIV.PA) umbrella, Decca has become a leader in the classical and Broadway music scene, and is expanding its pop music reach, most recently by signing ex-American Idol alum Clay Aiken last summer.

For all of The Beatles awards, records, and achievements, click here.

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