NEW YORK (Reuters Breakingviews) - It was 50 years ago that the Beatles started one of the greatest industrial booms of the 20th century. “Sgt. Pepper’s Lonely Hearts Club Band” was released in the United States on June 2, 1967, kicking off three decades of explosive growth in recorded-music sales. Though the industry has faded in and out, the LP’s simple messages still resonate, even in the broader world of business. As Warren Buffett and other executives have argued, if not quite so lyrically, by working together, experimenting and fixing holes, things get better all the time.
The Fab Four didn’t necessarily fancy themselves entrepreneurs. That means to glean any enduring lessons from their seminal work for the professional classes requires a grain of salt – or perhaps a cube of sugar daubed with something more powerful. Nevertheless, “Sgt. Pepper‘s” was the rare work of art whose influence continues to transcend boundaries, offering insights valid even to the dismal sciences.
First, “Sgt. Pepper‘s” was a consumer-product blockbuster. It topped the Billboard charts for 15 weeks and sold more than 1 million copies in a jiffy. More enduringly, the Summer of Love-era production offered a blueprint for a more lucrative business model for the music world, one where time spent in the studio proved financially superior to grueling hours of live performance.
Though “Sgt. Pepper‘s” doesn’t rank among the 20 top-grossing albums of all time, its commercial success unequivocally ushered in a new era for the 33 RPM album format. The Beatles even broke convention by not releasing a 45 RPM single from “Sgt. Pepper‘s.” Their follow-up in 1968, known as the White Album, is the 10th-best selling LP. Revenue from vinyl and cassettes surged from a few billion dollars in the 1960s to $21 billion in 1999, when the CD reigned supreme, according to figures compiled by the industry’s U.S. trade group.
Even after digitization and piracy more than halved those sales, the Beatles have remained key players in the emerging business models for music. On the occasion of the golden anniversary of the record that brought the world “Good Morning Good Morning” and “Being for the Benefit of Mr. Kite!” the Beatles sanctioned a dedicated channel on Sirius XM, the U.S. satellite-radio giant with some 31 million subscribers. Though it may be sheer coincidence, Sirius shares have surged 11 percent, adding $2 billion of market value, since the day before the Beatles-only channel started on May 18.
Dollar signs only capture a fragment of the impact “Sgt. Pepper‘s” has had beyond culture, art and entertainment. Working with producer George Martin, the band tinkered with new instruments, orchestral scores, tape loops and ambient sounds. Driven by competition with Brian Wilson and the Beach Boys, whose 1966 record “Pet Sounds” lit the way for studio experimentation, the Beatles “moved fast and broke things” long before Silicon Valley adopted the motto.
Then there are the poetic words. George Harrison sings of the power of self-actualization to improve the world in “Within You Without You,” perhaps laying the groundwork for hedge-fund gurus like Ray Dalio and other titans of industry to seek refuge and inspiration in transcendental meditation. Ringo Starr preaches the merits of collaboration better than any self-help book or management guru ever has in just 10 words: “I get by with a little help from my friends.” John Lennon and Paul McCartney state with the utter clarity of a TED talk that “fun is the one thing that money can’t buy.”
In the imaginative spirit of “Sgt. Pepper‘s,” it’s fun to try deriving symbolic meaning for the worlds of business and finance from some of its more whimsical ditties. Consider “Lovely Rita” as a futuristic glimpse into a world of autonomous vehicles; “Fixing a Hole” as a metaphor for improving infrastructure; “When I‘m Sixty Four” as a prescient warning of the looming pension crisis; or “She’s Leaving Home” as a commentary on household formation. Or don’t – that’s sort of the point of “Sgt. Pepper’s.”
It’s true the BBC banned Lennon’s surreal “Lucy in the Sky with Diamonds,” claiming the track was a veiled reference to LSD. He denied that to be the case, even if he sang of “turning on,” and in interviews ascribed creative powers to the hallucinogen. So did Apple founder Steve Jobs, who described dropping acid as “one of the most important things in my life.”
Jobs actually considered the Fab Four as role models. ”They balanced each other and the total was greater than the sum of the parts,“ he told ”60 Minutes“ in 2003. ”That’s how I see business: great things in business are never done by one person, they’re done by a team of people.” A year before he died, Jobs jumped through a virtual “hogshead of real fire” to herald the arrival of “Sgt. Pepper‘s” and the Beatles catalogue on iTunes. He considered it a breakthrough for Apple, after a long standoff that originated from the computer company sharing the pomaceous name with the label founded by the Beatles in 1968.
Even crusty Midwestern billionaire Warren Buffett would seem to draw some inspiration from, or find common cause with, “Sgt. Pepper‘s.” In his 2015 annual letter to Berkshire Hathaway shareholders, Buffett wrote with great optimism that “babies being born in America today are the luckiest crop in history.” Thanks to improvements in transportation, communication, medicine and the like, “America’s kids will live far better than their parents did.”
In essence Buffett was arguing, as Lennon and McCartney did a half century ago this week, that we have to admit the human condition is “getting better, a little better all the time.”
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