What the Ed Sullivan Show Did for the Beatles

Nearly 73 million people across America tuned in for The Ed Sullivan Show on Feb. 9, 1964 to see the Beatles perform live the new hit "I Want to Hold Your Hand." As millions of teens across the country screamed and cheered in their living rooms, it was clear, the British Invasion had arrived Stateside.

"For all that came after, the events of February 1964 remain to this day the best-known chapter of their well-known story: the Beatles "conquest" of America," wrote Jonathan Gould in The Beatles in America’s Special 50th Anniversary Issue.

Related: Business of the Beatles by the Numbers in Pictures

And it was more than a musical invasion -- as these four innovative musicians were not just artists, but also entrepreneurs. That 1964 Ed Sullivan show was an amplifier for the multimillion dollar brand called Beatlemania, which is still alive and kicking today. According to Forbes, The Beatles earned a combined $71 million in 2013 in the form of individual earnings, cash from ongoing album sales and other revenue streams.

The British Invasion

According to the Ed Sullivan site, the Beatles recording of "I Want to Hold Your Hand" was leaked in advance of its planned U.S. release date. At first Capitol Records tried to stop American DJs in their Beatle tracks, but eventually gave up and instead released the album ahead of schedule in December. The record sold 250,000 copies in the first three days, and by Jan. 10, 1964 it had sold over one million units and "I Want to Hold Your Hand" was the Number One song on the Billboard charts by month’s end.

Initially, The Beatles were making pennies, literally, per album sold. Justin Colletti, of online music magazine SonicScoop.com, says performing on The Ed Sullivan Show is what pushed the band to start making big money. He says Beatles’ then-manager Brian Epstein played this hand well: by taking less money ($10,000), sacrificing immediate revenue in exchange for three performances and a headlining slot, they gained exposure and a greater fan-base.

"This strategy allowed them to double their revenue within a year," Colletti says.

Of the 20 songs the Fab Four performed during their four appearances on the show, seven became No. 1 hits.

Don Cusic, music historian and professor at Belmont University in Nashville, Tenn., says music is a "high-risk, high-payoff" business, and "that the Beatles are still a current act is both incredible and important in money terms."

Echoing Cusic on the current relevance of The Beatles, Colletti brings up how 2000’s compilation of their hit songs "1" hit the top of the charts in 35 countries and became the best-selling album of the decade.

Albums

It’s estimated that in 1963 the band was worth about $56 million as a whole Beatles entity, which nearly doubled in 1964 to about $100 million after they sold more albums and started earning revenue on the recordings. The band holds the record for the most Number One chart toppers on the Billboard Hot 100 at 20, followed by Mariah Carey who has 18.

According to data from Nielsen SoundScan, The Beatles have sold 65,224,000 albums (and 14.6 million digital tracks) in the U.S. since 1991 (making the band the second biggest seller in SoundScan's history, behind Garth Brooks).

The Beatles top RIAA’s "Top Selling Artists (By Album Sales)" list with 177 million total album sales in the U.S. (Rolling Stone magazine puts the tally a little higher at over 1 billion records sold worldwide.)

"That makes The Beatles the RIAA’s top certified band in Gold & Platinum Program history," RIAA Director of Communications Liz Kennedy says.

Merchandise

While merchandise can be a major revenue stream for an act, Epstein has been widely criticized for making a "bad" merchandising deal in those early days where The Beatles would keep 10% income off product sales while Saltaeb, the company handling orders, would keep 90%. But, according to Colletti, the deal was renegotiated in 1964 so that the Beatles would take 49%.

Colletti says the split would have likely broken down with Epstein taking 15% and the Beatles taking 85% on profits of up to 150 pounds a week.

Copyrights

Capitol Records (parent company Universal Music Group) owns the rights to all Beatles’ recordings, as Capitol controls Apple Records -- the chief division of the bands’ multimedia conglomerate Apple Corps Ltd that launched in 1967. (The Beatles’ Apple Corps now has to license this name from Apple, Inc. (NASDAQ:AAPL), who retained ownership of the name per a legal settlement in 2007.)

Music is a business of copyrights. There are two main copyrights that affect Beatles’ profits: copyright of the recordings, which the publisher owns, and copyright of the songs, of which Sony/ATV owns 50%. As part of their original contract, The Beatles own the other 50%, but don’t control it and have never fully owned it either, according Cusic.

Sony/ATV purchased the song catalogue in 2005 for a reported $95 million from Michael Jackson, who had previously paid a reported $47.5 million for that half in 1985.

Rolling Stone magazine nailed it when they said, "[The Beatles] made writing your own material expected, rather than exceptional."

But when it comes to publishing, earnings for sales are split in half between publishers and writers, so the big money makers on this front are John Lennon (who alone earned an estimated $12 million last year, per Forbes) and Paul McCartney (who, according to Forbes, earned about $47 million in the past year) who penned the majority of the hits. George Harrison had at least a song an album, but Ringo Starr only had a few songs with his name on them.

The value on the band’s license of course is huge, so today it is pretty difficult to get access to Beatles’ music. For example, when Lionsgate wanted to feature "Tomorrow Never Knows" in an episode on the fifth season of Mad Men, the company paid a reported $250,000 to license the publishing rights from Sony/ATV and the rights to the recordings.

"They know constant exposure of their music would cheapen it," Colletti says.

That said, the Cirque du Soleil show Love! is based on and features the Fab Four’s music, and other ventures like The Beatles Rock Band video game, which has sold more than a million copies around the world, account for profits from licensing deals. Through Performance Rights Organizations today, artists signed with one of these societies like Ascap, BMI and Sesac are better likely to see the money from royalties.

Tours

Cusic says touring is where musicians today make the most money and would rank higher on the Beatles’ all-time ventures list, if they were on tour today, and also had they not quit road shows so early. The Beatles traveled light, and only had two roadies on their final U.S. tour.

"It wasn’t the era of big productions quite yet," Cusic says. "Top level acts today may make more than $1 million a night [gross profit], but for instance, Taylor Swift hauls 11 semis on her tours, which translate into high production costs."

In the early years the band didn’t have a ton of royalty checks coming in, so doing a concert series was a great source of income. For example, during a seven-show stint in Hamburg, Germany in the early 1960s they earned about 2,000 Deutsche Mark (roughly $26,000 in 2014) per show, according to Colletti.

That’s small pennies compared to the millions the band is worth today -- which Colletti says is much in thanks to that first appearance on The Ed Sullivan Show, the catalyst that turned them into larger-than-life rock gods.

"The Beatles really thought about their art in form of returns, [and saw] this financial ‘stuff’ as incentive to keep on creating," says Colletti.