The Incredible Business of Taylor Swift

How She Built Her $740 Million Empire

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Taylor Swift

Taylor Swift

You know her name.

And whether you’re a fan of her music or not, you can’t deny that the empire she’s created is incredibly impressive.

She’s not just a music star, she’s a savvy businesswoman whose neverending ambition, creativity, and work ethic have brought her to the pinnacle of the music industry.

Billboard named her Woman of the Decade at the end of 2019 and yet, since then, she’s only continued her ascent, building a $740 million fortune along the way.

Today, we’re diving into the story of Taylor Swift and what allowed her to rise to the top of the industry. At the end, I’ll share a few more of the keys to her massive success, things that all entrepreneurs can learn from.

Let’s get to it.

Early Days

Taylor was born in West Reading, Pennsylvania in 1989.

By the time she was 3 years old, she was already singing to people when she’d go to the beach with her family.

Her mom worked in finance and her dad was a stockbroker, something Taylor would tell everyone growing up that’s what she wanted to be, even though she had no idea what a stockbroker actually was.

The first album she ever got was of LeAnn Rimes, which certainly had an impact on her.

At just ten years old, Taylor would sing at karaoke competitions, and on spring break one year she convinced her mom to take her to Nashville so she could try and get a record deal, dropping off her demo tapes at various spots on Music Row.

While Taylor didn’t get a deal at that time, she was motivated to find a way to make it happen.

One way was through songwriting, something she’d become known for as her career progressed.

And her passion for writing was there early in her life as she’d recall her time in middle school: “I couldn’t wait to get home every day and write.”

At age 12 Taylor learned to play guitar and at only 13 years old, she caught a big break when she had the opportunity to sing at the US Open. A talent agent in the crowd heard her sing and, while she had a deal with RCA fall apart shortly after, she got a songwriter’s publishing deal with Sony.

Oh, and she was the youngest songwriter Sony had ever signed when she did so at only 14 years old.

Here’s what the Sony executive who signed her had to say about her:

The songs were great, but it was her, really. She was a star. She lit up the room. I liked her attitude. She was very easy to root for.

Arthur Buenahora

She was immensely talented from a young age, that much is clear, but she also worked at it nonstop for years prior to signing with Sony. It’s important to remember that.

I’m not sure if I fully believe in Malcolm Gladwell’s idea of 10,000 hours as the defacto amount to achieve mastery, but Taylor had obviously put in the work for years as a songwriter, developed her skill, and had the talent for it.

I liken this as well to the idea of founder-market fit. Clearly, Taylor had a passion for music from a young age, she wasn’t simply surfing a trend, and she combined that passion with repetition, writing whenever she could.

Her songwriting ability, singing, and unrelenting ambition combined to eventually make her an absolute force in the music industry.

But she needed to make a record first.

Debut Album

At 14 years old, Taylor and her family moved to Hendersonville, Tennessee, just outside of Nashville, so Taylor could pursue her music career.

It’s kind of wild that even happened. I mean, really, how many 14-year-olds do you think could convince their parents to move across the country to pursue their dreams? I wonder what those conversations were like.

Anyways, they moved, she had her songwriting deal, and Taylor continued auditioning for record labels:

I remember auditioning for record labels and having them tell me, “Well, the country-radio demographic is the thirty-five-year-old female housewife. Give us a song that relates to the thirty-five-year-old female, and we’ll talk.”

Taylor Swift

Of course, that’s not what Taylor did.

Instead, she found an untapped market.

What was that market?

Teenage girls who listened to country music.

Taylor knew the market well because she was in it.

It’s another parallel with founders who are able to find an underserved market and succeed by offering something to them they hadn’t been able to obtain previously. Even better when the founder is in the target market.

Reminds me of Marcos Galperin and how he was able to serve the Latin American market for e-commerce with Mercado Libre, turning it into a company with more than $10 billion in yearly revenue.

Taylor had the talent, had already written 150 songs by the time she was 16, and in 2005, she signs with Big Machine Records as their first client, releasing the Taylor Swift album in 2006, an album that reached number five on the U.S. Billboard 200 and stayed on the charts for 157 weeks, a time period longer than any other album in the 2000s.

And her promotion for this album was one of the strategies she continues to use throughout her career.

Yes, she performed as an open act early on in her career for a number of musicians, but the thing she did that created raving fans was so simple.

Do you know what it was?

Engaging with them.

Again and again and again.

This was early in the world of social media when Myspace was still a thing. Taylor promoted her music on her Myspace page, which was set up before she released the album, as well as through the standard radio tour.

Taylor, to her credit, was one of the earliest country music artists to use the internet and social media in this way, and by July 2017, 9 months after the release of her first album, she had amassed 20 million streams of her music on her Myspace page.

It’s reminiscent of how we’ve seen artists today like Lil Nas X leverage TikTok to build their careers, finding underutilized channels for distribution and building a fan base.

Taylor’s direct relationship with her fans also reminds me of Tyler Perry building up an audience for his plays through an email list that would grow to hundreds of thousands of people and which he’d use to make his first feature film a smashing success.

Building an audience of raving fans is extremely valuable and Taylor started focusing on this from the very beginning. As you’ll soon learn, she’s continued to find ways to connect with that audience in unique ways, something that has given her staying power in the industry.

Before we move forward though, we need to understand the basic economics of copyrights in music. This will be important as this story unfolds.

Here’s how my friend ChatGPT explains it:

Copyright in music can be divided into two types: song copyright and sound recording copyright. Song copyright protects the words and melody of a song, while sound recording copyright protects a specific recorded version of that song. Songwriters own the copyright to their songs, and performers or producers own the copyright to their recorded performances, which are also known as masters. These copyrights give creators control over how their music is used and ensure that they are compensated when others want to use their songs or recordings.

The important piece of this is that record labels often own the masters.

Got it?


Let’s move on because, with Taylor’s next album, things start to really take off, with the power of compounding working in her favor as well.

First Headlining Tour

By March 2008, Taylor built up an audience of 650,000 friends on Myspace, an audience she’d leverage again to promote her next album, Fearless, which was released in November of the same year and sold more than two million copies in 2008 alone.

But even before then, she released two EPs, The Taylor Swift Holiday Collection and Beautiful Eyes, in 2007 and 2008 respectively, taking advantage of her early success with her Taylor Swift album and continuing to pump out new music for her fans instead of making them wait for her next album.

In April 2009, she kicked off her first headlining tour, The Fearless Tour, which would bring in more than $66 million, with a total of 118 shows in North America, Europe, Australia, and Asia, ending in July 2010 and drawing 1.2 million fans.

Remember, this was only her first headlining tour and I give those numbers for context because I’ll mention the tour she’s currently on later in this edition of the newsletter to show you the power of compounding over time.

But 2009 was certainly a memorable year for Taylor for another reason, with the famous Kanye West interruption of her acceptance speech for Best Female Video for her song, You Belong with Me, at the 2009 VMAs.

She was only 19 years old at the time and in the middle of her world tour.

The next year would start the creative streak that produced the variety of albums and world tours that made her into Billboard’s Woman of the Decade.

Woman of the Decade

The 2010s for Taylor were an almost unfathomably successful period in her career.

She released five albums:

  • Speak Now

  • Red

  • 1989

  • Reputation

  • Lover

And she also performed the associated concert tours, having to cancel the Lover Fest tour because of the pandemic in 2020.

Every album and every tour seemed to outdo the one before.

Take her concert tours, for example.

While the Fearless Tour grossed more than $66 million, the Speak Now World Tour would gross more than $120 million, The Red Tour brought in $150+ million, The 1989 World Tour did more than $250 million, and the Reputation Stadium Tour grossed nearly $350 million.

And Taylor is involved with many of the details, from the design of the stage to the choreography of the performances. She’s calculated in a way that a repeatedly successful artist has to be.

Her albums also produced a steady stream of hits, topping the charts again and again during this time.

To even write about them individually would bore you with just how successful they have been.

The expectations for Taylor are high and yet she often exceeds them.

Even when she doesn’t, like when she gets a phone call to tell her that her Reputation album wasn’t nominated for a Grammy in a number of big categories, something we see in the Miss Americana documentary, her reaction is that of someone clearly incredibly determined:

"This is fine… I just need to make a better record.”

Even when she’s told that Reputation is a great album, she holds firm, with a response and attitude I love:

“No, I’m making a better record.”

She’s so damn determined and her attitude is just like the Jocko Willink idea of extreme ownership.

She owns her shortcomings.

Of course, while this time period brought about a great deal of success for Taylor, and she found ways to reinvent herself repeatedly, it was also a time of massive change, something many founders will go through as their companies evolve.

For Taylor, this meant switching labels, moving from Big Machine to Universal Music Group’s Republic Records in November 2018.

This was a big deal for two reasons.

First, with her new deal, Taylor would own all of her own master recordings, not the label. She’d essentially lease the recordings to them for a period of time. This is huge because the master recordings of all of her previous music are owned by Big Machine Records, which we’ll talk about in a second.

Taylor explained this aspect of the deal in this interview:

I really just want to make things better for other people and I want that to start at the record deal. In the contract artists should never have to part with their work. They should own it from day one but they should license it back to the label so that the label can make back their money over a certain amount of time and that amount of time should be what's negotiated upon, it should not be a question moving forward and if I can do anything to change that for a young artist in the future or many or all of them, then I'm gonna keep being loud about it.

Taylor Swift

Second, Taylor has a condition in her deal that, in the event of UMG selling any shares it owns in Spotify, a percentage of that money would go to the artists represented by UMG, non-recoupable, meaning they would get paid directly, even if they haven’t recouped their entire advance in the contract.

Here’s Taylor explaining it on Tumblr:

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. 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.

Taylor Swift

So Taylor has a new record deal, a great one at that, but you may have missed the important piece of what I just mentioned a few paragraphs before:

Big Machine Records owns the master recordings of all of her previous music.

At the end of the decade, that would come back to haunt Taylor.

Taylor’s Version and a Pandemic-Fueled Creative Explosion

In June 2019, Ithaca Holdings, owned by Scooter Braun, who once managed Taylor’s nemesis Kanye West, acquired Big Machine Records for $330 million.

The most valuable asset in the deal was of course Taylor’s master recordings for her first 6 albums.

This was highly contentious and Taylor was very upset by the entire situation.

But, she made a critical decision to counteract its impact, with a memorable tweet from Kelly Clarkson having some influence:

The entire situation just goes to show the importance of ownership for creators, something Tyler Perry stressed with his creative work and what ultimately made him a billionaire.

So Taylor starts re-recording her albums.

But wait.

How does an artist have time to consistently pump out new albums every two years, tour, and re-record albums?

You know the answer.

A global pandemic is how.

In 2020, Taylor would not only start re-recording her earlier albums, but she’d also release two more, Folklore and Evermore, as well as her Netflix documentary, Miss Americana.

The next year, Taylor released two of those re-recorded albums, Red (Taylor’s Version) and Fearless (Taylor’s Version).

2021 was a great year for her and one where Forbes estimated her net worth jumped from $365 million to $550 million.

It also set her up for another record-breaking album and a next-level tour.

Midnights and The Eras Tour

On October 21, 2022, Taylor released her latest album, Midnights, which would sell 6 million album-equivalent units worldwide in the first 2 months.

In the first week after its release, the album made Taylor the first artist in history with the entire top 10 on the Billboard Hot 100.

She found her creative groove in the past few years:

I found that the more I write, the more I keep writing. I don’t know what’s been going on, but in the last six or seven years, I’ve just been constantly making things. And the more things I make, the happier I am. So, I’ve just continued to do it.

Taylor Swift

Taylor followed up the album with The Eras Tour, a massive production, and one that will likely make her a billionaire.

But it started with her crashing Ticketmaster’s system.

According to Forbes, 14 million fans tried to buy tickets and on November 15th, the day they became available, 2 million tickets ended up being sold on Ticketmaster, the most ever for a single day and the demand on their system was four times their previous peak.

Four times!!

Absolutely unbelievable the numbers she can pull.

The Eras Tour started in March 2023 and will finish in November.

The 52-date tour takes place in 20 different stadiums, with Taylor singing 44 songs from 10 different albums each night. It’s a show that lasts more than 3 hours and is a testament to her unreal endurance as a performer.

It’s also one helluva production:

It’s almost like a different Broadway musical for each song. The production quality is just so far ahead of whatever has been done. They’re building these very elaborate sets that they’re using for several songs as opposed to the whole concert.

Dave Brooks, Billboard Senior Director of Live Music and Touring

Of course, that level of production doesn’t come cheap, but the hefty $100+ million production costs for the tour will be far outweighed by the revenue it generates.

Forbes estimates Taylor’s Eras Tour will generate around $620 million, with $591 million from ticket sales alone.

Even after expenses, Taylor could still personally make well north of $400 million from the tour.

I just want to note the years of hard work that got Taylor to this point.

It reminds me of this Naval Ravikant tweet about playing the long game:

Taylor has been producing her music for these same fans for nearly two decades - she’s played the long game.

She’s also reinvented herself repeatedly to stay relevant and that compounding of creative output and savvy marketing over time has not only made her fabulously wealthy but given her staying power in an industry filled with one-hit wonders.

The Keys to Taylor Swift’s Success

To break it all down, keys to how Taylor built her empire, let’s look at it from two lenses: Product and distribution.

On the product side, Taylor’s incredible songwriting ability and willingness to take risks with new music have produced an amazing product that fans love. Had she not been willing or able to reinvent herself, it’s hard to say she would’ve been able to maintain a career at this high level for so long.

Companies struggle with this same thing, with ones that fail to evolve often falling behind or going bankrupt. Just look at companies like Kodak or Blockbuster, for example.

But Taylor’s focus on the product extends beyond simply creating her music, it goes into her performances themselves where she has a hand in the details to make them stand out. It also goes into how she protects her product, with trademark applications filed for keywords and catchphrases, and even how she famously forced Apple to change its policy of not paying artists during a three-month free trial of Apple Music:

Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing. We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation.

Taylor Swift

But Apple wasn’t alone, Taylor also pulled her music off Spotify for 3 years starting in 2014 because she felt they didn’t value her music, saying at the time:

Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art.

Taylor Swift

Of course, you can’t build a business empire if nobody knows about your product.

On the distribution side, Taylor has also clearly excelled, taking her own unique approach.

Yes, she uses social media like other artists, but she’s found a way to leverage “easter eggs,” these hidden messages, to create even more buzz with everything she does, while also testing new platforms. Combine that with a relentless focus on her fans and doing things that don’t scale, like tens of thousands of 1 on 1 interactions with fans online, her T-Parties after her performances where she gives her most diehard fans a chance to meet her in person, and even how she delivers handwritten notes to thank radio station managers, and you can see how she built a loyal audience over time.

Her distribution isn’t limited to her own capabilities to market through social media, she’s leveraged partnerships to find creative ways to build buzz with her product, like the deal she struck with UPS to deliver her Reputation album, encouraging her fans to snap photos:

Combine an amazing product, loyal audience, and massive distribution, and you get one of the most desirable brands in music, one that has allowed Taylor to partner with companies like Coca-Cola, Covergirl, AT&T, Apple, and more throughout her career.

It’s also a brand that allows her to sell tens of millions of dollars worth of merchandise at her concerts, providing yet another revenue stream that built her $740 million fortune.

With all that Taylor has already built in the last two decades of her career and her continued upward trajectory of late, my guess is she only continues to climb higher for years to come.

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