On February 17, 1967, "Strawberry Fields Forever" and "Penny Lane" were released to the record-buying public, on what has since been described as the greatest 45-rpm record ever produced. Martin, who was complicit in the decision to issue the double-A-sided single, has since called that decision "the biggest mistake of [his] professional life." The factors behind Martin's regret are two-fold. First, as dictated by the customs of the day, releasing "Penny Lane" and "Strawberry Fields Forever" as a single precluded the inclusion of either song on The Beatles' forthcoming album, which, at that time, was envisioned as a spectacularly ambitious concept disc of a different sort than Sgt. Pepper's.

Martin later explained in The Beatles Anthology: "The only reason that 'Strawberry Fields Forever' and 'Penny Lane' didn't go onto the new album was a feeling that if we issued a single, it shouldn't go onto an album. That was a crazy idea, and I'm afraid I was partly responsible. It's nonsense these days, but in those days in was an aspect that we'd try to give the public value for money. Brian [Epstein] came to me and said, 'I must have a really great single. What have you got?' I said, 'Well, I've got three tracks – and two of them are the best tracks [Lennon and McCartney] have ever written.' So, we put them together …."

A second, more heartrending reason the decision was regrettable is that the concept album Lennon and McCartney had in mind would likely have been an even greater artistic triumph than Sgt. Pepper's turned out to be. Exhausted by the madness of Beatlemania, and having therefore given up touring, The Beatles were, in Martin's words, "generally fed up with their lives." With two magnificent songs to serve as lynchpins, the era's two finest songwriters envisioned crafting a collection of autobiographical songs that would take a kaleidoscopic view of their earliest memories, drawing inspiration from people and places in Liverpool that figured prominently in their childhood.

"We were in another phase of our career," McCartney explained, in The Beatles Anthology, remarking on the sense of freedom and imagination that had taken hold in Lennon and himself. "We didn't have to be performing every night, so instead we could be writing or chatting with our mates, or visiting an art exhibition. Having the time off gave us time to come in [to the studio] with crazy ideas. We were all opening our minds to different areas, and we [were] sharing it all with one another. There was a lot of cross-fertilization."

Of course, in retrospect, the album The Beatles eventually did come up with wasn't exactly shabby. McCartney's "When I'm 64," which was written and recorded during the sessions for the proposed "childhood" disc, became a high point of the Sgt. Pepper's album. Furthermore, songs such as "Lucy in the Sky with Diamonds" and "A Day in the Life" were nearly on par with "Strawberry Fields Forever" and "Penny Lane," and certainly occupied similar stylistic terrain. Still, the album suffered from weak moments, and even Lennon later concluded it was preposterous to call Sgt. Pepper's a concept disc.

"It doesn't go anywhere," Lennon said. "All my contributions have absolutely nothing to do with this idea of Sgt. Pepper and his band. [The album] was not put together as it sounds, except for Sgt. Pepper introducing Billy Shears, and the so-called reprise. Every other song could have been on any other album."