On… Taylor Swift, Cats, and the portfolio impact

MBW Reacts is a collection of analytical commentaries from Music Enterprise Worldwide written in response to main latest leisure occasions or information tales. Solely MBW+ subscribers have limitless entry to those articles. The under article initially appeared in Tim Ingham’s newest MBW+ Assessment e-mail, issued solely to MBW+ subscribers this week.

To know how intelligent Taylor Swift’s staff is, hearth up Google.

For my cash, Swift has solely made one main profession blunder over the previous six years: her starring function within the 2019 Hollywood stinker Cats. A movie so dangerous, Ricky Gervais memorably known as it “the worst factor to occur to cats… since canine”.

But plonk “Taylor Swift Cats” into the globe’s favourite search engine at the moment and also you’ll battle to identify any proof that this much-maligned film ever existed.

As an alternative, you’ll discover a number of Web optimization-dominant press articles (Folks, Cosmopolitan, US Weekly), plus one outstanding Reddit discussion board, all centered on the trio of home felines that Taylor retains as pets.

You’ll even discover, on web page one in every of Google, a handsomely furnished Wikipedia web page for one in every of Swift’s moggies, Olivia Benson.

Neglect ‘Taylor Swift in Cats’. Did you imply ‘Taylor Swift’s cats’?

You possibly can’t persuade me that any of that is coincidence.

To my thoughts, it’s excellent/purrfect proof that Swift and her self-run group can exert extra affect on the web, and its shoppers, than most companies may ever dream of.

She’s able to globally exploding her proudest and most profitable moments (see: Eras tour ticket gross sales). And, like a Mr Wolf of the web, she and her media acolytes can largely wipe clear her errors – as in the event that they by no means occurred.

This all supplies a wise justification as to why Swift simply spent a whole bunch of hundreds of thousands of {dollars} shopping for the grasp rights to her first six albums from Shamrock Holdings.

The logic: By leveraging her personal peerless fan-activating channels, Swift can set off extra curiosity in these information than arguably some other entity on earth. Particularly a publicity-shy non-public fairness agency with no actual capability to instantly persuade or inspire shoppers.

We don’t must re-live the full extent of the Swift masters saga right here. However in keeping with MBW’s sources, Shamrock paid Scooter Braun a complete of $405 million for the masters to Swift’s first six albums through a 2020 deal. That worth included $360 million upfront plus a subsequent $45 million earn-out based mostly on efficiency.

Studying between the traces of assorted latest media stories, it appears Shamrock could have bought Swift her masters for the same price to the $405 million it paid to get them.

This will surely clarify Swift’s enthusiasm for Shamrock’s conduct in the course of the course of. (Swift wrote the opposite week: “This was a enterprise deal to [Shamrock], however… I’m endlessly grateful. My first tattoo would possibly simply be an enormous shamrock in the midst of my brow.”)

If Shamrock didn’t make a bundle of revenue from the sale, don’t let your coronary heart bleed. Keep in mind that the agency has absorbed virtually 5 strong years of royalty cash-flow from these property, throughout a interval when Swift has ascended to never-before-seen business heights.

But, over and above the attraction of a quiet PE agency retreating from all of the Swiftian drama (Taylor’s Variations et al), you must surprise why Shamrock and its music heads (together with the favored Patrick Russo) determined to flip these property of the world’s largest megastar… now.

One principle: it’s all about Shamrock’s consciousness of the way forward for the music rights enterprise – and the way important the ‘portfolio impact’ shall be for anybody trying to declare a large chunk of it within the years forward.

In response to the IFPI, Taylor Swift’s recorded music has generated greater than some other artist on the planet for the previous three years in a row.

However right here’s the factor about being the world’s largest megastar in 2025: your dominance of the general market, identical to that of a significant file firm, is regularly being nibbled into by an limitless stream of music you don’t personal.

Firstly, there’s the persevering with wave of self-uploading artists to contemplate – a key issue within the addition of round 99,000 tracks per day onto streaming companies.

There’s additionally the incoming tsunami of AI-generated music from the likes of Suno and Udio. (Did you see that ‘Masters Of Prophecy’ – a hub for AI-made Musak – reportedly simply overtook Mr. Beast to turn into YouTube‘s fastest-growing channel?)

Lastly, and most significantly, there’s the rise of what would possibly as soon as have been termed ‘regional’ music – and its rising affect on international charts.

From Luminate‘s 2024 annual report: “English-speaking markets are shedding native share to non-English language imports…whereas many non-English talking markets present native content material gaining share.”

Artists from the US misplaced 0.20% market share of premium streams within the US final 12 months; globally, they misplaced 0.44%.

Regardless of Swift’s large recognition, as a market share proposition, even she is being affected by these developments.

In response to my studying of Luminate information, Swift claimed roughly 0.9% of the 1.4 trillion whole on-demand audio streams in the US final 12 months.

In business parlance, Swift is (in and of herself) a really vital unbiased label.

However it will be a shock if her share of worldwide streams (and due to this fact her share of streaming’s income ‘pie’) didn’t proceed declining within the years forward.

This brings us to the ‘portfolio impact’.

Firms like Common Music Group have grown used to seeing artists like Taylor Swift negotiate offers underneath which they maintain possession of their copyrights – and obtain increased royalty margins than they as soon as did.

UMG is due to this fact adjusting to a lower-margin actuality in relation to frontline music in 2025.

But, concurrently, main music corporations are working laborious to keep away from being overly uncovered to the fortunes of anybody artist.

Certainly, UMG’s High 50 artists solely accounted for 24% of its recorded music income in 2024.

In its newest annual report, the corporate wrote, “Our terribly various roster of artists… signifies that our enterprise’ success shouldn’t be reliant on one artist or perhaps a small variety of artists.”

Like its fellow majors, UMG faces its personal market share challenges from (a) the limitless inflow of music onto streaming companies and (b) the altering listening patterns of worldwide music followers.

That is partly why Common is investing $775 million to purchase Downtown — to bolster its market share throughout publishing and information, whereas additional lessening its reliance on the famous person economic system.

In distinction, for a passive investor like Shamrock, betting every thing on a single megastar, nonetheless dominant, is a harmful gamble. As musical consideration turns into more and more democratized, even the mightiest particular person catalog faces structural headwinds.

By way of her personal legacy, then, Taylor Swift has simply reclaimed management. However she’s accomplished so in a market the place ‘management’ is an more and more overseas idea.Music Enterprise Worldwide