SWIFT-LY BECOMING A BILLIONAIRE
Taylor Swift is providing a master-class about how to commercialise intellectual property – and you better pay attention or you will be left behind.
According to a recent Bloomberg article Taylor Swift, at just 33 years old, has become the newest addition to the Dollar Billionaire Club. Impressively, her wealth has been amassed in an incredibly short space of time and almost exclusively from her music. So what can we learn from this?
First of all, Swift understands the importance of her intellectual property rights. When she recorded her first six albums, her record label owned the master rights (who later sold them to an investment firm). To re-gain control of her music, Swift began re-recording those albums, which not only allowed her to regain ownership rights, but also diluted the value of the previously sold albums (which she does not own and from which she does not benefit commercially).
Understanding how intellectual property (IP) is created and how to manage it is the starting point for making money from one’s IP. The main form of IP in relation to music is copyright. It can be tricky to manage because it comes into existence automatically and the first owner of copyright in a work is not necessarily the author (although it often is).
The next step is to ensure that you commercialise your IP. Spotify pays notoriously small amounts to artists on their platform. Industry estimates are that musicians receive .0038 cents per stream, on average. Swift quit the platform in protest and only re-joined after re-negotiating more favourable terms.
As is noted the in the Bloomberg article, “Keeping rights is gaining importance for artists as music catalogs become more popular for investors as an alternative asset. Musicians from Bruce Springsteen ($550 million) to Justin Bieber ($200 million) have sold all or some of their music rights to private equity firms or specialty investment funds, like Hipgnosis, which intend to profit from the royalty streams.”
Swift has managed to commercialise her IP without the need to sale the catalogue, but rather use. She tours extensively and has even created her own film (The Eras Tour), which was the top grossing firm in its opening two weeks (ahead of Martin Scorsese’s new film).
Musicians, artists, venture capitalists and businesspeople alike should all be paying attention to how Taylor Swift is going about building her business empire. It is a real life MBA in creating, owning and commercialising intellectual property and the results really do speak for themselves.
If you are an artist – music or otherwise - contact the expert IP team at Witz Inc to discuss the best form of protection for your intellectual property rights.