Swift’s new record deal comes with stipulations.
Taylor Swift just signed with a new record label — and in the process, she has continued the PR offensive that she kicked off earlier this year with her first entrée into politics.
Swift is leaving behind her longtime label partner Big Machine Records, which has released all of her albums to date, to partner with Universal Music Group’s Republic Records (also the home of Drake). But the focus of the media narrative around Swift’s decision to change labels has less to do with the move itself and more to do with the stipulations that Swift attached to it.
There are two big stipulations in play here.
First, Swift will own all of her own master recordings from now on. That means she’ll own the copyright on the recording of any music she makes, which in turn means that she’ll have more control over where her music is used, and she’ll get a bigger cut of the profits. Big Machine Records will retain ownership of the master recordings of all her previous music, so this clause only applies to music Swift makes going forward.
Second, Swift has made it a condition of her contract that if Universal Music Group sells its Spotify shares, the label will distribute some of the money from that sale to all of the artists it represents, “non-recoupable,” meaning it won’t count against their advances. It’s a huge commitment from UMG that, until Swift’s deal, was far from assured.
UMG owns a 3.5 percent stake in Spotify, estimated to be worth $850 million. The label hasn’t sold any of its shares yet — but other record labels have. As Music Business Worldwide explains, earlier this year, Sony sold about half of its 5.7 percent stake in Spotify for $768 million, and Warner Brothers sold 75 percent of its shares — a less than 5 percent stake — for $504 million. The result was a huge influx of cash for both companies, and while both said that they would be sharing the money with their artists, Sony artists ended up seeing a lot more of it than Warner Brothers artists did.
That’s because the two labels took different approaches to how they passed that money along to their artists. It’s also why Swift’s deal is important for both her and her fellow artists at UMG.
When an artist signs with a music label, the label advances the artist some of the money it thinks the artist will bring in. Essentially, if an artist signs a $3 million contract, the label is saying, “We’re pretty sure you’ll earn $3 million in royalties in your first year of sales, so here’s that money early.” But that means the artist doesn’t get any more royalty payments until they’ve earned back that $3 million. ( You can read more about how advances work here .)
Whenever an artist hasn’t yet earned back an advance, they have what’s called “an unrecouped balance” with their label. As far as the label’s accounting books are concerned, the artist owes the label money.
So when a label sells Spotify shares — which means a big payday — it’s got two possible ways of sharing that payday with its artists. It can either count the money toward any unrecouped balances, or it can choose not to.
Sony decided that when it shared its Spotify money with its artists, it was going to ignore any unrecouped balances and send them the money directly, without applying it to their advances. Warner Brothers did the opposite, and applied the Spotify money to artists’ unrecouped balances before passing any of it along. In practice, that meant Sony artists got a big paycheck out of the Spotify deal, but the only thing that a lot of Warner Brothers artists got was the promise that they were a little bit closer to seeing an actual royalty statement someday.
No one knew exactly which road UMG would take when it eventually sold its Spotify shares — until Taylor Swift announced her new record deal. Now, UMG has committed to taking the Sony road rather than the Warner Brothers road. That means the label’s Spotify money will go directly to its artists, right away.
“As part of my new contract with Universal Music Group, I asked that any sale of their Spotify shares result in a distribution of money to their artists, non-recoupable,” Swift explained on Tumblr . “They have generously agreed to this, at what they believe will be much better terms than paid out previously by other major labels. I see this as a sign that we are headed toward positive change for creators — a goal I’m never going to stop trying to help achieve, in whatever ways I can.”
For Swift, this move is a public relations coup. It solidifies her position as a power player in the industry who can single-handedly set norms, and it simultaneously continues the narrative of Swift as a plucky underdog artist, fighting for her fellow musicians against the corporate greed of record labels.
Swift has been fighting that fight since 2014, when she removed all of her music from Spotify’s library in an act of protest against the platform’s low streaming royalties. It came up again in 2015, when she publicly tussled with Apple Music over its royalty payments. And again in 2017, when she returned her music to Spotify after it adopted a “windowing” policy, wherein newly released music would be available only to paid subscribers for a specified window of time. (That move also let Swift conveniently steal some spotlight from Katy Perry, which was just gravy.) There’s no reason to think that Swift is insincere or uncommitted in this fight, but the fact remains that it is consistently good for her image and generates flattering headlines for her.
And Swift seems to have been courting flattering headlines for the past few months. Her image took a major hit in 2016, when Kim Kardashian published a video that seemed to catch Swift in a messy, public lie about Kanye West, and the ensuing fallout lasted through the release of Swift’s 2017 album Reputation.
But as Kanye West has spent more and more time wearing a MAGA hat in public and saying that slavery was a choice, Swift has begun to strategically position herself as someone who is easier to like than Kanye West. She’s stopped keeping her head down, as she noticeably did even through the release of Reputation, and stepped more firmly into the spotlight than she has at any point since 2016. Kanye West is losing, which means Taylor Swift has the opportunity to win again.
After pointedly refusing to discuss politics for most of her career, Swift stepped forward in October to call on her young fans to vote, endorsing two Democratic candidates in her home state of Tennessee. Swift’s candidates lost, but the voting advocacy site Vote.org did report a massive and measurable surge in the number of registrations it got from young people following Swift’s call to arms.
