Why does Taylor Swift want to own her masters?

By Sarah Montgomery

Taylor Swift’s music has changed in more ways than one. The country-turned-pop singer’s catalog of music recently changed hands, from Scott Borchetta to Scooter Braun.

Taylor Swift
Photo courtesy Taylor Swift’s Instagram account

Borchetta sold Big Machine Records to Braun, a manager for many big-name artists , for $330 million dollars. As part of that deal, Braun acquired the music rights to everything the label owns. Five of Swift’s six albums are now his property. 

Swift was offered the opportunity to buy back her masters (music industry jargon for the first recording of any song)—with a major catch. Under Big Machine, she would have been able to buy back each album with a new one in exchange. In essence, she would have had to sell away her future to buy back her past. She refused, leaving her old art with Big Machine, and moved to Republic Records in 2018.

Swift was one of the biggest artists under Big Machine, which houses lesser-known stars like Thomas Rhett and Lady Antebellum. Allegedly, Borchetta had been looking for a buyer for years. If he had let Swift buy back her music, he would not have gotten nearly as much money as he did in his deal with Braun.  

In most cases, this would not be newsworthy. Many artists don’t have ownership over their own work; it is an accepted reality in the music industry. 

The big deal is that Swift vehemently hates Braun. She has called him a bully, going so far as to say “my musical legacy is about to lie in the hands of someone who tried to dismantle it.” She specifically cites an instance in which he and two of his clients, Justin Bieber and Kanye West (with whom she has legendary drama), got on a FaceTime call and posted a photo of it with a caption that taunted her. She also points out that West used a lookalike of her naked body in a music video, which she amounts to finding Braun complicit in revenge porn. 

Justin Bieber, Kanye West, and Scooter Braun on FaceTime.
Photo courtesy Taylor Swift’s Tumblr Account

Swift does not have many options to better her situation. She plans to re-record the old songs, which she is contractually allowed to do in November 2020. This will devalue her entire catalog, as there will be two copies of one product. Alternatively, according to the 1976 Copyright Revision Act, artists can reclaim ownership after 35 years.

The most she can do is pressure Braun to let her buy back her masters, which is why her social media campaign against him may prove useful. That being said, Swift is worth about $320 million. It’s possible that even if she had the opportunity to buy back her masters, she would not be able to afford it. 

Swift is already feeling the repercussion of a wrathful custodian. Financially, it is in Braun’s best interest to license Swift’s music. But he, a man worth $400 million, could theoretically shoulder a few losses to punish her for lashing out.

Swift, at the 2019 American Music Awards, wearing a jumpsuit emblazoned with the names of albums she recorded under Big Machine. She won Artist of the Decade.
Photo courtesy Getty Images

Her team announced that the record label is not letting her use her old music or performance footage for a few major projects, notably a Netflix documentary and the Alibaba “Double Eleven” event she performed at. She just barely got permission to use her music for a performance at the American Music Awards. Considering the majority of money artists make comes from touring and concert sales, this next year could very well be a financial dry spell for Swift. 

Record labels hold an unbelievable amount of power in the music industry. Whoever owns the masters will always control and benefit from any use or licensing of those songs. For this reason, many artists are going independent these days or are strictly negotiating ownership rights. With the rising popularity of direct-to-consumer distribution platforms, such as Sound Cloud and Youtube, being independent has never been easier.

On the other hand, there are a lot of perks for signing with a label—a massive advance (read: money), access to a strong industry network and other benefits that vary by contract. The most important thing for many artists is that labels will often handle the entire business side, from marketing to brand management. So labels will take a gamble, financially backing and professionally supporting you now—at the cost of owning your music and the majority of your future earnings. 

Braun and client Arian Grande.
Photo courtesy One Love Manchester

Because contracts are usually very private, the financial arrangement between Big Machine and Swift is not entirely clear. Let’s imagine that, through subscription costs or advertising revenue, consumers are ultimately paying Spotify $1.00 per stream to listen to “You Belong With Me.” Typically, about 70 cents of that dollar goes to the rights holder, in this case being Big Machine. If the label were to pay the artist 15% of their share, that would amount to just 10.5 cents to Swift. And remember, that’s just an estimation; labels have total discretion of how much they will pay artists. 

Courtney E. Smith, a writer for Refinery29, notes that labels tend to have shady accounting practices, so trust is an essential aspect of any artist-record label relationship. Braun may drastically reduce her payout from the company for her work or maybe even not pay her at all. As it is now, Swift already claims that the label owes her $8 million in unpaid royalties. 


Swift, who signed with Big Machine at age 15, is using this all as a cautionary tale to up-and-coming artists. “Hopefully, young artists or kids with musical dreams will read this and learn about how to better protect themselves in negotiation,” Swift writes. “You deserve to own the art you make.”

Taylor Swift’s album can’t be streamed (yet), and that’s the economically smart thing to do

Taylor Swift performs on her 'Speak Now' tour in Sydney, Australia, in March 2012.

Taylor Swift performs on her ‘Speak Now’ tour in Sydney, Australia, in March 2012. (Photo by Eva Rinaldi via Flickr under CC-BY SA 2.0 license).

Last week, Taylor Swift was responsible for one-third of all music sold or streamed in the United States. Her newest album, reputation, on its own sold nearly double the rest of the Billboard 200 combined. And despite releasing only four singles from the album on streaming services, Swift came to dominate those charts as well.

Swift’s choice to withhold access and force listeners to pay for her music has interesting implications for the streaming music industry, which remains unprofitable despite climbing numbers of paying subscribers. The latest numbers peg market-leader Spotify at 60 million subscribers, with second-place Apple Music coming in at 30 million. The growth of these services has been the primary driver of increasing revenue for record companies, whose U.S. revenues grew 11.4 percent in 2016 to reach $7.7 billion, according to industry association RIAA.

But that figure is still only about half of what it was in 1999, before early music streaming services like Napster entered the market, the RIAA said. As music became widely available online, consumers became less willing to pay for it, driving down revenues. The recent uptick in paid subscriptions has yet to make up for more than a decade of declines.

“We’re no longer running up a down escalator,” Warner Music CEO Stu Bergen told The Guardian, “but that doesn’t mean we can relax.”

The major challenge faced by both streaming services and the music industry is the popularity of YouTube, where songs are often available for free (legally or illegally) and revenues sent back to the music industry are miniscule. Spotify contributes an average of about $20 per user to the industry, according to The Guardian, while YouTube sends less than $1 its way. In 2016, that meant just $553 million in total revenue from YouTube compared to $3.9 billion from Spotify. Both these figures are far lower than comparable music sales revenue would be for the same number of listeners.

Throughout her career, Swift has taken a stance against making music widely available online, defending her copyright on YouTube and withholding her releases from streaming services. Her entire catalog was only available to stream for a few months in 2017, until reputation was released to buy but not to stream.

Swift wrote in 2014 that “music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for.”

Free or subscription music can be great for consumers, but it prevents sellers in the marketplace from gauging how much someone values an artist’s creation. In economic terms, Swift’s choice to temporarily withhold her latest album from streaming services and allow interested customers to pay for access enables a kind of price discrimination that can increase efficiency and better match supply and demand. As John Paul Titlow of Fast Company explained:

Many of the people who care most about her music felt compelled to do something that seems rare these days: They bought the album. Others, like me, did nothing.

[…]

And to be sure, many of the diehards who bought a physical copy of Reputation will likely add it to their streaming libraries as well. But by then, Swift will have already smartly extracted maximum value out of the people who care the most. And why shouldn’t she?