Taylor Swift’s Label: If We Keep Making $0.000001, We Can’t Keep Making New Records…

borchettafront

Criticize the non-major labels and superstars all you want, but streaming simply doesn’t make financial sense for them.  Like Taylor Swift, whose label group*, Big Machine Records, has weathered heavy criticism for withholding music from streaming services like Spotify.

But neither Big Machine nor Swift need the ‘exposure,’ at least not the kind that streaming services offer.  And they certainly don’t need the fractional pennies that come with it, especially when iTunes pays it all upfront.

 

“I think it’s a continued race to the bottom and we’re gonna fight to continue to have a value to the artists and the music that we put out,” Big Machine CEO Scott Borchetta told Billboard over the weekend.

 

Borchetta also alluded to a better deal ahead with Beats Music, which suggests that cofounder Jimmy Iovine may be extending sweetheart deals to mega-stars to compensate for paltry payouts.  That’s a cellar door Spotify doesn’t want to open, for obvious reasons.

 

hand-left July 17th: Spotify Research: Holdouts Suffer Far Greater Piracy, Lower Relative Sales…

 

Which means, for now, Taylor Swift will remain on streaming services, but only after substantial windowing delays and only on selected catalog.  “We understand people are streaming, we get it,” Borchetta continued.  “I’m not saying we’re not gonna be there.  I think people want to keep streaming new music.”

 

“Well, news flash: If we keep making $0.000001, we’re not gonna be able to afford to keep making records.  So there is a value there and we’re going to keep pushing to make sure that value is appreciated by everyone.”

 

Pursuant to that thought, Borchetta recently inked a dedicated deal with Clear Channel Communications, one that includes direct, premium royalty payments across broadcast, streaming, and other uses.  That has been replicated to other major terrestrial broadcasters, and most recently mimicked by Warner Music Group.

 

Written while listening to Monsieur Periné.

*earlier, we referred to Big Machine as Taylor’s ‘label and management group,’ and Borchetta as ‘manager,’ though that is outdated: now, Taylor oversees management through 13 Management, as a ‘self managed artist’.  Thanks Big Machine for the correction! -paul.

 

18 Responses

  1. GGG
    GGG

    The ten songs with visible counts on her Spotify page (top ten, but they don’t seem to be ordered by playcounts), should have grossed her label somewhere solidly between $800K and $1M alone, based off payouts we’ve seen posted on here. If this was their sole rev stream I’d say they’re concerns are well-founded. But, once again, until someone can prove streaming eats sales, you can say this is a new stream just as much as you can say it’s a shitty replacement for sales.

    Reply
    • Lee Dixon
      Lee Dixon

      You make some very good points. Recording royalties are obviously only one of the revenue streams in question for Taylor Swift. There are also a lot in writers royalties and also huge amounts in guest appearances, sponsorships, merchandise and the largest revenue stream of all which is Gigs!

      Major still havent adapted to a changing music business and this is where the problem lies. Maybe one day they will work out how to shift capital they are investing from one stream to another, or just simply dont exist (which will be the best solution for everyone!).

      Reply
    • Visitor
      Visitor

      “until someone can prove streaming eats sales”

      Give it a rest, GGG — pleeease!

      You’re the only one here who thinks that people buy what they can get for free.

      If you and Spotify and the Pirate Bay had it your way, music would be over.

      Reply
      • GGG
        GGG

        Despite the last sentence of that post which I worded that way more for effect, I’ve actually explicitly stated numerous times I think the bulk positive for streaming is people that were never going to by the music in the first place. Ie, pirates, the curious, the people who can’t afford to buy a ton of releases, etc.

        At some point there will obviously be a tipping point, but at the time subscriber numbers will be in 6 figures.

        But yea, I’m the one whose killing music. Not you, the one who perpetuates our shit mainstream music culture with songs a 14 year old can write. And often times do.

        Reply
        • Chris
          Chris

          Actually the latest Kantar figures from the UK show that paid subscribers to streaming services spend far more than any other sector.GGG is bang on teh money with this – Vistor are you the same prick who thinks that if Shazam was cancelled we’d be earning billions? If you are then you are an idiot

          Reply
          • GGG
            GGG

            That Shazam guy is Tune Hunter. This particular Visitor is a pop songwriter who bases success solely on if you have the number 1 song in the world. Anyone grossing less than a million dollars a day is a complete and utter failure.

            They also blame their lack of success on everything except the fact they clearly can’t write a song anyone wants to buy in a genre of music where songs have the shelflife of a banana.

  2. Yves Villeneuve
    Yves Villeneuve

    I think Borchetta summed it up perfectly: won’t be a part of the race to the bottom. That’s good business management.

    Investors need to stop growing on the backs of labels/artists and prove their model will be profitable without taking concessions from its suppliers.

    Unfortunately, executives know many artists aren’t business geniuses and the latter are a simply flattered to continue receiving any revenues at their expense because their weak self-esteem or ego needs shameful nurturing, which never solves anything.

    If the streaming model will be profitable, show us the math, we’re not interested in empty promises. Nothing proprietary about business math. Show us the line by line accounting numbers you expect to report to insiders on future profitability.

    I’d be interested in supplying music to Beats if they are not part of the race to the bottom and they deliver sales revenues to rights holders fairly quickly.

    I’m sure Borchetta also understands on-demand audio streaming is a passion for music nerds mostly, a 10% minority, 30% if you believe Spotify and Deezer (one of these first reported the false claim to better compete with iTunes data and the others followed suit.)

    Reply
  3. Casey
    Casey

    Does he really get it? Ask those people at Rhapsody who just got laid off if he is really being paid $0.000001 per stream. That kind of exaggeration really invalidates his entire argument. Nor is it his only revenue source. Taylor Swift brings in crazy amount of revenue to his label making windowing completely unnecessary. He’s just showing that music industry greed music pirates will recite for years to come. Not gonna be able to afford to keep making records? Seriously? Does he take Taylor Swift’s fans as idiots?

    Reply
  4. Bruce
    Bruce

    Indeed Taylor has been her own manager since the legal age of 18 and she’s never made a stupid move. Borchetta has let her have control actually since he signed her at 15 and it’s worked out rather well I’d say.

    Reply
  5. Visitor
    Visitor

    Taylor Swift’s Label: If We Keep Making $0.000001, We Can’t Keep Making New Records…

    Ok, so don’t fucking make another record.

    Reply
  6. reinkefj
    reinkefj

    I’m an “old” Swiftie. I understand the value equations. Modern media has to figure out “personalization”. I have Ms. Taylor’s music thru itunes or Amazon. “Vending” that in the most User friendly fashion is needed. I like Pandora, others for their ubiquity or ease of use. Needs to be “figured out”. (imho)

    Reply
  7. AllYourScreens
    AllYourScreens

    I loathe the continuing streaming vs iTunes argument because it’s truly apples and oranges.

    You know why iTunes pays more? Because people are purchasing a physical product, at least as physical of one as you can purchase in a digital world. It’s roughly equivalent to arguing that you make more money from a CD than from when someone listens to your music on the radio. It’s true, but it’s a false equivalency.

    Believe me, the first time Taylor Swift’s career hits a bit of a slump (and it inevitably happens to everyone), streaming her new album will seem like a much more attractive option.

    The policy I don’t understand about streaming is why so much older, catalog music is kept off of streaming (and for that matter, off of digital completely).

    Let me give you one example. I was recently trying to track down a late 80s release on Epic. Ghost on the Beach by the Insiders. The release did decent numbers at the time and the title cut was a small hit. But it’s not available on iTunes or anywhere else. I needed the song for a project and tracked down members of the band who would love to see it on Spotify or iTunes, but it’s just fallen through the cracks.

    Yes, it’s not a lot of money for Epic or the band. But multiply this one times all the other examples and major labels are leaving tons of money on the table.

    What’s the point of being a near monopoly if you can’t use your catalog to generate some long tail money?

    Reply
  8. David
    David

    Out of interest, I tracked down the source for this, which was a live interview. Borchetta actually used the phrase ‘zero zero zero zero zero zero one’, so whether you interpret that as $00.00001, $0.000001, or $.0000001 is a matter of taste. They are all several orders of magnitude below the true figures for Spotify or even Pandora (about $00.001 per play) but it is obvious in context that Borchetta was not claiming to give a literal figure, just to indicate that the amount per stream is very small.

    Reply
    • Casey
      Casey

      Apparently the number is large enough that he couldn’t actually say it and still prove his point or he simply wants to lead people on with false information. Someone might have done the math and figured out that a lot of services pay ~ $0.01 per play and combined that with the high number of streams Taylor Swift receives which would generate some serious cash despite the incredibly small marketshare streaming services current have.

      Reply
    • GGG
      GGG

      I assumed he wasn’t being literal, so my point still stands. Ten songs alone have generated around $1M. Add her other 4 albums or whatever, they’ve easily made a few mil from streaming. And this is with very low subscriber numbers.

      Reply
  9. Visitor
    Visitor

    to the anti-streaming it takes food off the table critics. you do realize that nothing you say will ever stop streaming, or increase the rates you’re paid – right?

    that being true … don’t you ever get tired of complaining about things you have no control or influence over?

    Reply

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