MBW Reacts is a series of analytical commentaries from Music Business Worldwide written in response to major recent entertainment events or news stories. MBW Reacts is supported by JKBX, a technology platform that offers consumers access to music royalties as an asset class.
Over the past few weeks, Music Business Worldwide has been rooting out new details about one of the music business’s most argued-over sagas: the sale of the master rights to Taylor Swift’s first six albums, originally recorded for Big Machine.
In our latest chapter of this investigation, we obtained – and published elements from – an unsigned June 2020 NDA mutually drafted between Swift’s team at 13 Management and Scooter Braun’s Ithaca Holdings.
This NDA was created to advance talks between the parties over the potential sale to Swift of her ‘Big Machine’ masters from Ithaca. It contained what appeared to be a fairly boilerplate clause preventing each side from speaking publicly about confidential deal negotiations (pictured below).
Crucially, this clause didn’t appear to contain any restrictions that would prevent Braun and Swift from making personal comments about one another publicly.
Swift would later characterize this NDA as “stating I would never say another word about Scooter Braun unless it was positive”, and “a document that would silence me forever before I could even have a chance to bid on my own work”.
She added: “My legal team said that this is absolutely NOT normal, and they’ve never seen an NDA like this presented unless it was to silence an assault accuser by paying them off.”
Swift further alleged: “[Braun] would never even quote my team a price” for a deal.
They claim that Braun actually offered Swift’s team two solid opportunities to buy her ‘Big Machine’ masters for set prices: USD$300 million in November 2019 (with full pre-agreed financing from 23 Capital), and then for $305 million in October 2020.
(13 Management and Ithaca Holdings also both signed a previous, more basic NDA – in November 2019 – that legally enabled the former company to obtain and explore the financials of Ithaca and Big Machine.)
All of that, though, is now firmly in the past.
Whether or not there were some elements of Swift and her team ‘negotiating in public’ with Braun via accusations about the aforementioned NDA, history will show that, in the end, a deal wasn’t agreed between 13 Management and Ithaca.
Braun would eventually ink a sale for the master rights to Swift’s first six albums to Shamrock Capital for a total of USD $405 million in October 2020.
So what happened next?
That’s the focus of this article – where we reveal just how successful Taylor Swift’s ‘Taylor’s Version’ re-records of her Big Machine albums have been so far, ahead of the release of Speak Now (Taylor’s Version) this Friday (July 7).
These ‘Taylor’s Version’ recordings have not only already been lucrative on their own terms – they’ve also clearly suppressed the popularity of the original versions of these albums, now owned by Shamrock Capital.
Taylor’s Version re-records: The initial pessimism
Taylor Swift’s plan to re-record her Big Machine masters – initially announced during an interview with CBS in August 2019 – caused widespread discussion across the music business.
Reports have even suggested that Universal Music Group (to whom Swift has been signed directly since 2019) altered the wording of artist contracts in the wake of Swift re-recording two of her Big Machine LPs as new releases: Fearless(Taylor’s Version) released in April 2021, and Red (Taylor’s Version) released in November 2021.
The Wall Street Journalreported in 2021 that Universal modified contracts so that its artists were legally restricted from re-recording their UMG albums until seven years after their last delivered LP in a given label agreement, or five years after the end of their contract term – whichever came later.
Meanwhile, Swift’s fellow artists were almost unanimously supportive of her decision to re-record her Big Machine masters, though there was some uncertainty as to how successful the endeavor may become.
Glenn Tilbrook of Squeeze – whose band re-recorded its hits in 2010, but saw fans continue to overwhelmingly play/prefer the original versions of these tracks – told Rolling Stone in 2019: “My advice to Taylor Swift is that it takes an awful lot of time, trouble, and money to [re-record hits faithfully], and I would question what the intended outcome would be.
“If she does it and gets away with it, of course, I support her efforts 100%.”
Tilbrook and his fellow artists needn’t have worried. Swift didn’t just get away with it – she blew even optimistic projections out of the water.
Taylor’s Versions: The 2022 numbers
In one of MBW’s previous deep dives on the Ithaca/Big Machine/Swift situation, we noted that Swift’s first two ‘Taylor’s Version’ albums (Fearless and Red, each released in 2021) both significantly dented the popularity of the original versions of these LPs in the United States:
Over the course of 2022 – the first full calendar year that both re-recorded albums were available – Red (Taylor’s Version) was played a whopping 961.6 million times in the US via on-demand audio streaming platforms, according to Luminate data;
Fearless (Taylor’s Version) was played 401.2 million times in 2022 on these platforms;
In the same year, the original version of Red banked 254.7 million plays in the US (again, via on-demand audio streaming platforms) – down by 41.0% YoY (from 432m plays in 2021);
Meanwhile, the original version of Fearless was streamed 257.0 million times in the US in 2022 – down by 16.5% YoY (from 307.7m plays in 2021).
Despite these YoY declines for Fearless and Red, however, the cumulative amount of US audio streams pulled in by Swift’s original six Big Machine albums in 2022 grew – up by 6.5% YoY to 2.46 billion plays, according to Luminate data.
A significant proportion of these streams was made up of the (still yet-to-be-re-recorded) 1989 album, which secured 736.4 million on-demand audio streams in the US in 2022 (around 30% of that 2.46 billion-stream Big Machine catalog total in the year).
The growth in cumulative streams for Swift’s ‘Big Machine’ masters in 2022 explains how Scooter Braunwas able to bag a $45 million ‘earn out’ fee from Shamrock Capital (taking the full price paid by Shamrock to Ithaca Holdings for the masters to $405 million).
This additional $45 million, paid to Braun/Ithaca’s shareholders in Q1 2023, was contingent on the continued growth in popularity of Swift’s ‘Big Machine’ masters overall.
New data based on the first half of 2023, however, suggests that Braun might just have gotten out of the Big-Machine-masters-ownership business at just the right time.
Taylor’s Versions: The 2023 numbers (with a re-recorded Speak Now coming down the tracks)
As you might have read, Taylor Swift is having a very big 2023.
Her Eras world tour is potentially on track to gross more than $1 billion, becoming the first-ever global concert run to eclipse this commercial milestone.
Meanwhile, Swift’s most recent studio album – Midnights – continues to be a juggernaut, racking up over 1.6 billion US on-demand audio streams this year to date, according to Luminate data.
It’s perhaps no surprise, then, that Swift’s six ‘Big Machine’ albums, now owned by Shamrock – especially 1989 – are on course to grow in popularity yet again.
In the first 26 weeks (six months) of 2023, according to Luminate data analyzed by MBW, the original ‘Big Machine’ albums pulled in 2.14 billion on-demand audio streams in the US.
That’s not far off the full volume of audio streams (2.46 billion) the same six albums secured in the whole of 2022 (see below).
That’s good news for Shamrock Capital, of course. But there’s another angle on this story that might just make the financial company sweat a little.
Remember that in 2022, the two ‘Taylor’s Version’ albums (Red and Fearless) dominated US streams of their originator albums?
Some might have expected that this was a result of a year-one marketing push from Universal Music Group, and the fact that the ‘Taylor’s Version’ records (both released in 2021) were fresh in the public’s mind.
If that was true, you’d also expect this phenomenon to settle down over time – i.e. that the listening habits of Swift fans, old and new, would begin to revert back to the ‘Big Machine’ recordings and away from the ‘Taylor’s Version’ recordings as the months and years wore on.
Check out the below numbers: They show that in the first 26 weeks of 2023, both ‘Taylor’s Versions’ of Red and Fearless have continued to substantially out-stream the original versions of these albums in the US by a ratio of around 1:3 (Red) and around 1:2 (Fearless).
(That being said, both original and ‘Taylor’s Version’ denominations of Red and Fearless have seen a significant uplift in popularity YoY.)
Not that Swift releases a ‘Taylor’s Version’ re-record of Speak Now, as she’s planning to do this Friday (July 7).
Instead, it’s that she finally tackles re-records of her two most enduringly popular Big Machine albums: Reputation and, most pointedly, 1989.
In the first six months of 2023 alone, 1989 has been streamed 658.7 million times on audio platforms in the US, according to Luminate.
That’s more than 89% (!) of the total volume of audio streams that 1989 racked up across the whole of 2022 in the same market.
It’s also more streams than either of the available Taylor’s Version albums (Red and Fearless) have attracted this year so far.
Evidently, if Swift really wants to put the popularity of her original Big Machine albums to the test – while rattling the nerves of their current owner – there is one LP, in particular, she will need to re-imagine.Music Business Worldwide
