A Capitol agreement

Capitol picture sleeve for Penny Lane/Strawberry Fields Forever

When manager Brian Epstein informed EMI that there would be no new album, or even a single, by the Beatles in time for the 1966 Christmas market, Parlophone Records in England compiled a greatest hits package entitled A Collection of Beatles Oldies, but Capitol Records curiously declined to issue it in the States, thus leaving "Yesterday"...and Today and Revolver as the only albums to appear here during that calendar year.  Yet, as 1967 dawned, it was Capitol that famously pressed Epstein for a new release from the group after such a prolonged absence (six months!) from the public eye, resulting in the brilliant single Penny Lane/Strawberry Fields Forever and removing those two titles from the current project-in-the-works, disrupting the concept of an album about the boys' Liverpool childhood.

Around the same time, in January of '67, Epstein negotiated new royalty agreements with both the British and American labels.  An important part of the deal with Capitol as far as producer George Martin and the Beatles were concerned was artistic control of their releases.  Back in 1964, they had been delighted merely to have "conquered" the American market and to have their records appear on such a prestigious label.  They were quickly disappointed, however, by the way their output was repackaged for consumption by US fans, with albums bearing little or no resemblance to the British originals.  Martin had taken great care with the layout of each album right from the start, arranging Please Please Me as an approximation of the group's live act.  By the time of Rubber Soul and Revolver, the exact sequence of songs was considered to be essential, not only on the album as a whole but even on each side of the record.

Now, Capitol agreed not only to begin releasing the group's albums as they were issued in Great Britain but also to refrain from creating compilation albums and singles beyond the official worldwide releases.  The timing of this agreement could not have been better.

On June 1st in the UK and June 2nd in the US, two identical versions of Sgt. Pepper's Lonely Hearts Club Band were released.  Well, almost identical...  American pressings of the album did not include the high pitched tone or the gibberish on the inner groove at the end of side two, but the thirteen tracks are all presented in the same running order and with the same unusually brief pauses between songs as on the British release.  Even the packaging was identical, right down to the cardboard cutouts.  For the first time, the artistic integrity of the project was not compromised, much to everyone's satisfaction. 

Capitol stayed the course in July with the release of the worldwide single All You Need is Love b/w Baby You're a Rich Man but, at the end of the year, a problem arose which prompted the label to deviate from the program.