In the season premiere of "Acquired," hosts Ben Gilbert and David Rosenthal delve into the business and influence of pop icon Taylor Swift. They explore how Swift's strategic moves, from reclaiming her masters through re-recording albums to her groundbreaking deal with Universal Music Group, have reshaped power dynamics in the music industry. As an artist who has consistently reinvented herself, Swift's journey from country starlet to global pop sensation is marked by her direct connection with fans, savvy negotiations, and leveraging disruptions like streaming to her advantage. Despite the music industry's relatively small economic scale, Swift's career stands as a testament to her creative genius and business acumen, earning her a place among the most influential artists of her generation.
"Welcome to season ten, episode one. The season premiere of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle based Pioneer Square Labs and our venture fund, PSL Ventures." "And I'm David Rosenthal. And I am angel investor, based in San Francisco."
The quotes introduce the hosts and the theme of their podcast, which revolves around technology companies and their backgrounds.
"She is Billboard's woman of the decade. She was the first woman to ever win the coveted album of the year Grammy twice, and now she's won it a third time. She was the highest paid celebrity in the world in 2019, more than Kanye, LeBron James, Roger Federer, or even Beyonce."
The quote summarizes Taylor Swift's accomplishments, highlighting her significant impact on the music industry and her role as an advocate.
"I think yours used to be 1989, and now it's reputation." "Fearless. An uncommon pick, my friend." "Mine was 1989. And I am an ever or a folklore fan now."
These quotes show a conversation about personal music preferences, indicating the hosts' admiration for Taylor Swift's work and its influence on them.
"Our next sponsor for this episode is one of our favorite companies and longtime acquired partner pilot for startups and growth companies of all kinds." "Which is wild because when we started working with them way back when, they were just a startup themselves, and now they're a billion-dollar plus company backed by Sequoia, index, Stripe and even Jeff Bezos himself."
The quotes emphasize the growth and success of Pilot, the podcast's sponsor, and its relevance to startups and growing companies.
"We also want to tell you listeners that if you are new to the acquired community, you should make it official. Join the over 11,000 smart people at acquired FM Slack." "And without further ado, David, take us in. And listeners, as always, the show is not investment advice."
These quotes invite new listeners to join the Acquired community and provide a disclaimer about the nature of the show's content.
"There is no official big book biography out there about Tswift, but there is actually quite a good book out there." "On December 13, 1989, lucky 13 at the Reading Hospital in West Redding, Pennsylvania, not far from where both of us were born and spent our childhood years."
These quotes provide context on the sources of information about Taylor Swift's life and her family background, which contributed to her musical career.
"I was kind of like an annoying fly around that place. I just would not leave him alone."
The quote reflects Taylor Swift's determination and ambition in her early years, demonstrating her drive to succeed in music.
"I began absolutely nonstop tormenting my parents, begging them on a daily basis to move there." "I didn't just want to be another girl singer. I wanted there to be something that set me apart, and I knew that had to be my writing."
These quotes highlight Taylor Swift's persistence and vision for her career, leading her to make the bold decision to walk away from RCA.
"She is among the few artists who are born with a gift that just rolls out of her. I still marvel at how this young girl with limited life experiences at that point could write such lyrics and melodies."
The quote from the CEO of Sony ATV Nashville acknowledges Taylor Swift's exceptional songwriting talent, which became a defining aspect of her career.
"You can tell when someone just really gets you. The best part of getting a record deal wasn't just that it was a record deal. It was the right deal for me."
Taylor Swift's quote reflects her belief in finding the right partnership with a label that understood her vision, leading to her signing with Big Machine Records.
"So there are a few really great sources on this if you're interested in learning more."
The quote indicates the complexity of music licensing and the importance of understanding the industry for artists and professionals.
"When 90 plus percent of startups fail, well, you need some kind of economic split so that the benefit of the winners that you bet on can more than make up for all of the losers that you bet on."
This quote explains the need for a financial model in venture capital and the music industry that allows for a few successes to offset many failures. It highlights the risk inherent in investing in startups and new musical talent.
"Thanks to Myspace, she has 20 million interactions. Whoa."
This quote emphasizes the impact of Taylor Swift's early adoption of social media, which facilitated a large number of interactions with fans and helped establish her popularity.
"I want to meet you. I want you to come up to me, say hi to me in public. I will thank you myself."
Taylor Swift's desire to personally connect with fans is a testament to her understanding of the importance of fan relationships in her success. This quote reflects her commitment to fan engagement as a key element of her brand.
"It ends up in total on the Billboard top 200, it spends 275 weeks on the charts."
This quote underscores the extraordinary chart performance of Swift's album, indicating its long-lasting popularity and the strong connection it made with listeners.
"That was a catalyst moment that would change the economics of the music industry."
The quote captures the idea that a single, high-profile incident involving Taylor Swift had far-reaching consequences for her career and the broader music industry, highlighting the interconnectedness of personal experiences and professional impact.
"It's my opinion that music should not be free."
Swift's stance on music streaming is clear in this quote. She argues that music, as valuable art, should not be freely accessible without compensation to the creators.
"I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company."
This quote reflects Swift's disappointment with Apple Music's initial policy, showing her willingness to publicly challenge industry giants on behalf of artists' rights. Her successful push for change underscores her influence and commitment to fair compensation for artists.
"The 1989 tour grosses $250,000,000. So that's a quarter billion dollars from the tour."
This quote highlights the massive revenue potential from touring, particularly for high-profile artists like Taylor Swift.
"The Reputation tour, which grossed $266,000,000 in the US and 345 worldwide."
The significance of this quote lies in the fact that Taylor Swift's tours can outdo even her own past records, indicating her growing popularity and earning potential.
"Reputation has some just, like, amazing songs."
The quote reflects a reassessment of the album's quality and significance after its initial reception.
"Reputation was inspired by a series of events and is a very different album than its predecessor of 1989."
This quote is crucial as it sets the stage for understanding the personal and emotional context that shaped the album's creative direction.
"On Valentine's Day, February 14, 2016, Kanye west releases the life of Pablo."
This quote introduces the album that played a significant role in the events leading up to Taylor Swift's album Reputation.
"Kanye west releases the life of Pablo... it has the song famous. Famous, which has the famous line in it."
The quote underscores the specific song and lyric that contributed to the controversy and its impact on Taylor Swift's career.
"Taylor's was six. That's about market from what I could tell."
This quote reflects on the standard length of record deals in the music industry and sets the stage for discussing the end of Swift's contract with Big Machine.
"Taylor does all of Taylor's own stuff, but she doesn't have any issue with big machine per se."
The quote indicates that while Swift was ready to move on from Big Machine, there was no inherent conflict with the label itself, highlighting the business nature of her decision.
"Just a thought. You should go in and rerecord all the songs that you don't own the masters on exactly how you did them."
This quote from Kelly Clarkson's tweet suggests the idea of re-recording old songs, which Taylor Swift later implemented.
"Taylor goes on Good Morning America and announces that she's going to do this."
The quote confirms Taylor Swift's public commitment to re-recording her albums, highlighting her determination to regain control of her music.
"Taylor comes out with a post about this and says, this is my worst nightmare."
This quote captures Swift's emotional response to the sale of her masters and sets the tone for her subsequent actions in the music industry.
"Taylor even says that she knew that once she went somewhere else, it was obvious that big machine was going to get sold."
The quote shows Swift's awareness of the potential business moves following her departure from Big Machine, indicating her understanding of the industry's workings.
"So, interestingly enough, Warner does this. They only give 25% of the appreciation, but they do it as a credit that will be recouped against earnings from albums."
This quote highlights Warner Music's approach to sharing Spotify's stock appreciation with artists, which required future earnings to pay back the advance.
"So Sony was kinder. They said that the money that they gave to artists was non recoupable, totaling $250,000,000 of a total windfall."
Sony's approach is noted for being more artist-friendly, offering a substantial non-recoupable sum to artists from Spotify's stock appreciation.
"In Taylor's negotiation, as a sticking point in her contract with UMG, she forced their hand to do the best deal of any of the labels by far."
Taylor Swift's negotiation prowess led to a potentially better deal with UMG, which may have set a new precedent in artist-label agreements regarding streaming revenue.
"That is like some new customer coming to you and saying, by the way, in order to do business with us, not only do you need to give us a screaming deal, but you need to kind of change the way that your other existing contracts work that I have nothing to do with."
This quote illustrates Swift's ability to dictate terms with UMG, demonstrating her significant bargaining power.
"And pledge this asset that has nothing to do with me."
Swift's influence is so strong that she can demand changes in business practices that benefit her and potentially other artists.
"So Taylor Swift has an astonishing 200 million followers on Instagram, which makes her the 14th most followed in the world."
Swift's social media presence is a testament to her widespread influence, which she leverages in her business dealings and music distribution strategies.
"We don't yet have total earnings numbers for 2021 for Taylor. But as I mentioned earlier, her net worth estimated by Forbes in August of 2021, was 550,000,000, up from 365 less than a year before."
This quote highlights the financial success Taylor Swift has experienced within a year, emphasizing her economic impact in the music industry.
"Taylor is 31st of all time in highest pure music sales."
Despite being relatively new to the industry compared to legacy artists, Swift's sales rank her highly among all-time music artists, indicating her commercial success.
"The reputation tour is the 19th highest grossing tour of all time, including ones that run for multiple years."
Swift's touring success contributes significantly to her financial impact, with her tours grossing substantial amounts and outperforming longer-running tours.
"So Universal Music Group is now a totally separate entity, but at one point was part of MCA Universal, which Michael Ovitz sold to Matsushta."
This quote reveals UMG's historical connection to Matsushita Electric, illustrating the long-standing relationships within the music industry.
"Do you know who owns 20% of UMG that we have done an acquired episode on and is a big part of acquired lore?"
The ownership stake of Tencent in UMG underscores the cross-industry and global ties within the music business.
"Crazy how interconnected this web is."
The music industry's complexity is highlighted by the various connections and ownership stakes among different entities and individuals.
"So you're Taylor. That's the analysis."
Taylor Swift's business strategy is examined through the lens of the Seven Powers framework, treating her career and assets as a business entity.
"Branding is a no brainer."
Swift's strong brand recognition is a crucial element of her business power, influencing her success and negotiations.
"I suspect the biggest one she's got is scale economies."
The scale of Swift's audience and music consumption allows her to leverage economies of scale in her business dealings and potentially bring operations in-house.
"Her productivity has been skyrocketing, and her skill and the complexity of her songs has also been increasing."
Taylor Swift's growing productivity and skill in songwriting have significantly contributed to her influence and success in the music industry.
"She's able to bend the truth a little bit or tell a specific version of the truth a little bit."
Swift's storytelling ability extends to how she presents her narrative to the public, often to her benefit and sometimes to the benefit of the industry at large.
"The free download in 99 killed the CD sale, which was the cash cow of the industry."
The shift from physical CDs to streaming is discussed, with Swift navigating and capitalizing on these industry disruptions to further her career and financial success.