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The success of her Midnights album tells us surprisingly little where the American music industry stands now, writes The Financial Times’ Anna Nicolaou.
In investing and in life, we often seek bellwethers to help make sense of the big picture, or predict the future.
After a hurricane in America, rescue crews track which Waffle House restaurants are closed to gauge where the damage is worst. Investors scan FedEx’s financial statements for clues about the broader economy; if the postman is weighed down with packages, things are going well.
In trying to sort out where the music industry stands, it would make sense to look at how the biggest musicians are faring. But in 2022, what should be bellwethers are sometimes the opposite.
Take for example, Taylor Swift and the concept of superstardom.
Over the past decade, the US music industry has changed dramatically. Streaming has taken over and revenues recovered. Wall Street stormed in. Some people have become rich.
But audiences have also fragmented. Any record executive will tell you that it’s harder than ever to score a hit. With Spotify adding some 60,000 tracks every day, even the stars are seeing their share of listening decline. “Hits” are no longer as big.
It’s a phenomenon that chief executives of the largest companies have admitted to – and even bragged about. BMG chief Hartwig Masuch this summer said: “The extraordinary thing about our first half result is that we grew revenue 25 per cent with virtually no hits.”
Warner Music chief Stephen Cooper told an investor conference in September that the company had successfully reduced its “dependency on superstars”.
These comments are hard to reconcile with the sales of Swift’s latest album, released on Oct 24. In less than a day, Midnights was already the biggest seller of the year and is forecast to reach about 1.5 million in sales by the end of the week. The last person to achieve this kind of numbers was also Taylor Swift, five years ago. In the past decade, the only albums to reach that coveted 1 million first week threshold have been from Swift in 2017, 2014 and 2012, Adele in 2015 and Drake in 2016.
A post shared by Taylor Swift (@taylorswift)
There’s a simple reason why this has become increasingly rare. Some half a billion people around the world pay to stream music. But, with the exceptions of countries such as Japan and Korea, where CDs are still popular, today’s listeners aren’t buying individual albums.
In previous eras, Michael Jackson, Prince, The Beatles, Carole King and others could sell millions of albums at their debut. Today, some J-pop and K-pop artistes, such as BTS, still pull off big numbers, But in the streaming-driven US landscape, a successful star might hope to make just 200,000 in first-week sales. Harry Styles’ Harry’s House, this year’s previous big breakout, reached about 521,000, and Puerto Rican trap star Bad Bunny’s Un Verano Sin Ti 274,000.
Midnights’ 1.5 million is a number from another era, putting Swift in the category of 1990s boy bands – the previous financial peak for the US music business. “She’s basically an intellectual property franchise now. Like a DC (comics) movie”, says Matt Pincus, founder of music publisher SONGS.
Big companies and marketers spend billions of dollars and countless hours obsessing over “engagement” and “KPIs” as they try to reach fickle gen-Z consumers, whose attention is split between video games, TikTok, Discord, YouTube, television, podcasts, etc.
Meanwhile, Swift’s fans in Argentina and Chile are buying billboard advertisements on her behalf, or strategising about how to boost her sales numbers. “Hitting 1.3 million would freak her out so much so please keep buying and streaming,” one fan account posted to Twitter – a reference to Swift’s “lucky number” being 13.
In another twist, vinyl records have become the currency of these teenage super-fandoms, who view them as collectibles. Midnights has already sold more than 500,000 vinyl copies.
Tatiana Cirisano, a music analyst and former Billboard journalist, says part of Swift’s advantage is that her career took off when it was easier to hold people’s attention. “It genuinely is a lot harder to make something a mainstream hit today than it was even two years ago. People can listen to whatever they want and get it at any time they want, and you have algorithms pushing people further into specific niches.”
This is all good news for Universal Music, the industry giant and home to Swift, although only marginally. In signing with them in 2018, Swift negotiated a deal to own her music. Universal receives a fraction of the revenue for distributing it but, as with everything else, Swift stands alone.
By Anna Nicolaou © 2022 The Financial Times.
Copyright© Mediacorp 2022. Mediacorp Pte Ltd. All rights reserved.
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