Disney’s Taylor Swift Era
stratechery.com
stratechery.com
I think that's a poor reading of Swift & her team. They've clearly got a rock-solid understanding of supply & demand, and other economic concepts, to the extent that their behaviour subverts textbook economic thinking.
Spotify acts like a textbook perfectly competitive marketplace: all actors have perfect information, there are no monopolies, the market price for all items is the same, and all vendors are price-takers (the platform controls the price). Within this framework, Scooter Braun's masters of Swift's work, and Swift's "(Taylor's Version)" re-recordgins are homogeneous products. A textbook reading of this setting should assert that, through supply & demand, both versions should attract an even split of consumption. But most consumers willingly choose to listen to Taylor's re-recordings[1] over Braun's masters.
[1] https://www.billboard.com/lists/taylor-swift-taylors-version...
> I think that's a poor reading of Swift & her team.
My read of Thompson's piece was that he agrees with you. He quoted Patel to say that he (Thompson) agreed with him (not her) back in 2014 but later learned that this reasoning was wrong -- too shallow and too net-boosterist.
Of course it can. Nobody's "subverting textbook economic thinking," a ridiculous assertion.
That statement is even more laughable when you realize that she is one of the most financially savvy people, and both her mother and father worked in the financial industry.
No where else is this true. No one will say the children of doctors should definitely be medically savvy.
I interpreted this as a criticism of Swift's attempt to generalize her experience to the rest of the artists in the industry.
As you say, Swift and her marketing team have a solid understanding of what her fans will accept. However, to have her say that her tactics are applicable to musicians who don't have anywhere near her sort of following comes across as tone-deaf (heh) at best, and disingenuous at worst.
"Taylor Swift telling you to follow your dreams is like a lottery winner telling you to sell everything and invest in the lotto." being the culmination
Not to detract from your point, but that's not really true: https://support.spotify.com/us/artists/article/royalties/
> Contrary to what you might have heard, Spotify does not pay artist royalties according to a per-play or per-stream rate; the royalty payments that artists receive might vary according to differences in how their music is streamed or the agreements they have with labels or distributors.
https://www.rollingstone.com/music/music-news/taylor-swift-f...
The Billboard article seems to be saying that when the new album was released people… bought the new album rather than the old one (they probably already had) during the same time period.
And that total streams on new tracks are higher than old tracks that weren’t on streaming for years and (as the OP notes) people had to buy copies.
Certainly hardcore Swifties are staying true but most consumers just don’t care about the morality of their music (see Chris Brown for instance).
Two two revenue moat opportunities: 1 - physical experiences and 2 - customer "investment" drives enthusiasm, as a kind of brand-fueled sunk cost fallacy.
Successful b2c businesses understand point 2, but the cool thing is that it can be supercharged through point 1 (if you have such a business...doordash is out of luck on this one; WeWork pretended that they were trying it).
Disney is interesting - the business is a survivor. Iger was smart to come back and turn around the Chapek disaster, but I get the feeling he doesn't know where to go from there. But even under Chapek they didn't forget the importance of IRL:
I have an extended family relative who works in film distribution with Disney. Even during Covid when they furloughed or laid off lots of people and focused on streaming, they didn't lay him off, which seemed odd to me (it's not like he is a VP, and theatres were closed). A few times we talked about the film business and his belief was straightforward: streaming doesn't make meaningful money while a film in a cinema can do hundreds of millions of dollars. I was dubious (I hate the cinema and the whole "movie" experience) but Barbenheimer is a good example of why I'm probably wrong.
So then when you look at Walt Disney's drawing included in the article, you see a semicircle of "experiences": parks, films, and (underexploited by Disney) concerts, and semicircle of "reinforcement" so your brand remains front of mind: streaming, toys and other in-home products. That's where you can get the pushme-pullyou. So streaming can be a winner even if it's run at a loss.
Meanwhile what's dying is ESPN, ABC, and the general TV business, dragging Disney down.
ESPN is odd because it is a multiplier on its own, but doesn't really seem to generate any money outside of advertising. The sports teams and their own live events benefit from the ESPN system though. I don't know who would buy that brand, it made the most sense as its own cash cow.
Personally I've seen Disney weather many storms in the past, they have pushed out a lot of stinkers and have even had long periods of duds. But their back catalog and branding always remained strong. Disneyland will probably continue to make profitable returns and continue to be a destination. And honestly they may have just focused on the wrong things when it came to streaming, its possible it'll rally with a different focus, like something that strengthens their brand in the long run. I guess I don't really see Disney declining in the wrong run as long as they can make adjustments and play to their strengths again, while ditching the stuff that is weighing them down.
The market appears to have reached the fatigue point with those (and Indiana Jones). Either they mismanaged the brands or properly milked them heavily while the market was hot. I suspect the latter, perhaps intentionally. Even the Beatles faded with time.
ESPN's big money maker turned out to have been cable carriage fees (I assume the same was true for ABC, but don't know). That is augering.
I'm not a huge fan of Disney as a cultural influence but, as you note, they have survived pervious difficult periods and will probably profit from the new world that is developing.
They did this in Indy 5, they did this in the new Star Wars movies, they did this in Marvel's Secret Invasion, and She Hulk... And it's awful.
"Prior to this era, there was no distinction between music adults and teenagers listened to. E.g. Frank Sinatra was popular with multiple age demographics.
Starting in the late 1950s, being a cool teenager meant that you liked music that was different than what your parents listened to. This was first seen with rock and roll."
It's interesting to see this come full circle to the point that Taylor Swift crosses multiple age brackets.
It certainly felt that way and it was talked about... but people I knew always listened to a variety of music. The running joke on Youtube about something like Wilson Philips "Hold on" was that "Somewhere out there there's <insert unlikely demographic> is rocking out to this song".
I don't doubt there were differences among demographics, but I also wonder how much we as humans look for those lines and exaggerate them. I honestly didn't even know who Taylor Swift was for an embarrassingly long time and I yet enjoyed her songs when I heard them. I wonder if for most of the masses it really doesn't matter, but enthusiasts and marketers are the folks who care / notice the differences that might not ever have been THAT stark.
The below article (from 2014) has a great perspective on how popular TS was not just in the US but also globally and how rare this was (and still is):
https://priceonomics.com/some-artists-are-big-in-america-som...
Before about 2000 I think you'd find most people, not all but most, tended to listen to smaller varieties of music. Top40/Pop radio stations played a very safe middle ground of music. There was never anything too avant-garde or experimental. The 70s and 80s saw a lot of radio stations cropping up targeting particular genres rather than just one late night DJ that loved that genre. This included "oldies" stations catering to previous decades' Top40 back catalogs. Big record stores were very clearly organized by genre which was copied by the big box stores when they started carrying significant music sections.
It wasn't until finding single tracks online was easy that I think many people branched out with musical styles. Someone hearing a single on the radio of a genre they didn't normally listen to were unlikely to go drop $15 (in 199x dollars) on a whole CD of that artist. Relatively few artists actually released CD singles (in the US) so that $15 entry fee to a new genre wasn't trivial.
Fast forward to the early 00s in the era of P2P and iTunes (the clear industry juggernaut) and singles were now readily available. If you wanted that one rap or dance track you could easily get it without dropping $15 on a whole album. YouTube and then streaming just made this sort of thing even easier and cheaper. Someone spending $10 a month on music in 1993 had access to far fewer choices than someone spending the same amount today.
For one she is genuinely talented. Many pretty singers are in fact terrible song writers and mediocre musicians. Their hits are often written by middle aged men, occasionally middle aged women, and rarely themselves and pulled from fake books.
Taylor Swift can write music, sing, dance, and even play her music so she is in rare company with those talents. It helps her a great deal she is attractive. There's plenty of talented women in music that aren't/haven't been as successful because they aren't "pretty".
The second part of her uniqueness is she came up in an age of peak media saturation and peak ease of distribution. When Taylor Swift started the Internet was already big and she had a significant online following. iTunes ascension was also happening so she could easily sell to people only wanting singles rather than whole CDs which maximized her sales under the price/demand curve. P2P file trading was also prominent so she got even more space under the price/demand curve.
The third part of her uniqueness is her age. She's positioned right between Millennials and Gen Z which are both pretty large demographic cohorts. Even her early work was fairly mature (considering her biological age) so it didn't just appeal to people her age. If she was ten years older I don't think she'd have her current level of impact, it would be significant but might not straddle generations so she'd have far fewer younger fans.
The situation in the 50s and 60s was very different. Distribution was harder and more expensive, there were fewer radio stations, and music on TV was very limited. Not to mention just fewer radios and TVs. A household might have one of each but it wouldn't be until the later 60s you might expect a teenager to have their own record player or radio in their bedroom.
By the time of Taylor Swift it would be uncommon for a middle class teenager to not have at least their own radio. A non-trivial segment had their own computers by then so could easily access Taylor Swift's online presence, fan-based or direct.
So I'm not sure her appeal to multiple age brackets being the overall industry coming full circle but instead some unique factors of Taylor Swift individually.
We didn't have a theme park in all of Europe until the '90s, but the whole continent grew up with Mickey Mouse & Donald Duck.
Disney just shut down the Galactic Starcruiser, a two-day immersive Star Wars LARP experience which was weirdly mis-marketed as a hotel. Adrian Hon has a long, interesting writeup on it and suggests that future versions could be much more successful: https://adrianhon.substack.com/p/star-wars-galactic-starcrui...
That's my take anyway. It would be interesting to know the % of kids in the US that have been to a Disney park at various points in time. My wild guess is that the number has always been well under 10%.
I'm surprised it is physically possible to sing for 3 hours, 6 nights in a row.
(I don’t have a source on that, just something I remember hearing years and years ago)
Maybe I’m easily fooled, but if she was lip-syncing a lot I don’t think they’d leave these imperfections.
the rarity is not the source of the value, but an amplifier for the value in a market driven society
> 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.
does she understand privilege? she's a music slaver, she's advocating that music remain a limited experience accessible for a few. I have a HUGE problem with this.
this is, in my view, an energetic interaction centered about value, perceived value, and measured value. i could say more but i rant... something something digital assets can be copied for free let's not let a scarcity mentality ruin this for all.
finally, what she really sells in her shows has real value, the scarcity is her physical existence, this is NOT THE SOURCE OF VALUE. the energy/money dynamics are a form of power.
edit: I echo this sentiment: "Sad to see generations grow up on music being a spectator sport and not a communal, participatory activity". but notice how this huge Taylor mega shows ARE a communal activity. Dancing is the main avenue for communal musical participation
She's advocating that artists get paid for their work and not sell themselves short. Whatever means our society permits that allows artists to capture the value of their work should be taken. If you want music to be "open access" and effectively patronage that's fine but it doesn't change her point.
We're in a golden era right now where the art itself is so cheap it might as well be free and paid for by scarce goods sold to fans who can afford them. If you squint it's almost pay-what-you-want. My $10/mo Spotify subscription cost me $0.00002/hr last year.
Music is only ever free when it's forbidden. It's one of them paradox thingies.
Sad to see generations grow up on music being a spectator sport and not a communal, participatory activity.
They have built a substantial portion of the worth from forming very close emotional bonds with girls from a young age.
There are a millions of women who have not just grown up with Disney princesses, but grew up with a very emotional bond to them.
Shrek may be good, but nobody wants to be Shrek and Fiona, the way girls want to be Ariel, Belle, and Elsa.
I'm happy for them, but dude really: "I’ve been here for 21 years I can’t remember anything as important as these Taylor Swift tickets"
I wasn't old enough to go but I remember seeing the pictures on the news.
Those podcast discussions about Swift in the last several years have heightened my awareness of her music. I'm not particularly a fan but I now stream each new release.
I think media publicity benefits both sides. And my experience of the world is slightly bigger as well.
Yet, she is the biggest popstar on the planet.
It's weird, somehow she is everywhere in image and presence but the art she produces eludes me.
On the other hand, there are catchy songs like the Benny Hill theme that I know by heart, yet I could not name the proper name of the song nor who composed it. I just know it as the Benny Hill theme.
Lies.
Music is so fragmented these days that there's no comparison to Pink Floyd and Rolling Stones days.
M/30+/not the US
But you know what is probably the biggest factor for me: I am single and don't have kids.
Save for commuting to work or the supermarket or the occasional outing, I almost live under the proverbial rock.
These each have multi-billion views on YouTube. I suspect if you listen you will recognize them. And if not, well here you go! Now you've heard Taylor.
https://www.youtube.com/watch?v=nfWlot6h_JM
https://www.youtube.com/watch?v=e-ORhEE9VVg
I never said I haven't heard her music. What I meant was that I cannot properly identify her particular music.
Like I said, if I was in a game show scenario, maybe I could guess that a song is hers and win the money, but if you gave me a multiple choice and you put in songs with other artists who sound like her then there's a good chance I'd lose.
Recognizing, isn't knowing.
Meanwhile, I'm coming from the other side - I'm a musician and I've been wondering why is it I don't care much for the music of the biggest pop star on the planet? Usually when it comes to the "pop tarts" as I call them, they have something I like.
Not so with Taylor Swift.
I've listened to all her top hits. I've tried using AI to find songs I might like based off of other music I like. I've basically come up empty-handed. If there's a song where the music is interesting, it's ruined with her vocals or her simplistic rhyme schemes (I really find her rhyme schemes super annoying!).
The most interesting song she has is Shake It Off. The use of a saxophone in modern pop music is welcome and I find the repetition in lyrics better than her usual rhyme schemes. No surprise it was co-written by Max Martin.
Ahh, the halcyon days of damn near every 80's Top 40 hit.
And what they should do more of isn't legacy content in a new medium — i.e. putting those same TV and movies online instead of cable, but new content that hasn't been completely explored yet.
I didn't start playing video games until recently, but it is obvious that is where the puck is going to be. For example, GTA V has made $8.3B since its launch in 2013. https://www.tweaktown.com/news/91612/grand-theft-auto-franch...
And the shooting video game CSGO has players spending $100M/mo on "cases," https://www.dexerto.com/csgo/players-reportedly-spent-100-mi...
A title with even broader appeal, League of Legends, seems to have roughly 180M MAUs (2023, https://riftfeed.gg/more/player-count-league-of-legends) and $1.75B in revenue in 2020. https://www.esportsbets.com/news/riot-games-revenue-2020/
For comparison, Disney+ had 157M subscribers worldwide (and ~$8B in revenue https://www.demandsage.com/disney-users/)
The above games don't seem to be games anymore — at least, not in the Kerbal Space Program sense, my only frame of reference. They're content distribution systems with players consuming content in bite-sized doses as they play. Their active user bases are larger than what Disney's, and arguably more engaged.
These titles are usually quite violent and based on new IP. With their coffers and IP library, Disney could easily make something better that offers more compelling experiences with modern technology.
Disney Research has been chugging along on doing "story telling" with the help of ML for quite some time now, https://studios.disneyresearch.com/projects/ , with recent advances, they could conceivably arrive at interactive storytelling experiences that allows every child (and adult) to be inside the fantasy universe of, say, Beauty & The Beast and play out a meaningful role in that universe.
If the current modes of content and content delivery don't work, why shouldn't they try something like this at a larger/more serious scale?
If anyone can turn games into a mainstream content delivery platform, it's Disney. And by owning the means of distribution, they can go back to adding more arrows to Walt Disney's diagram.
I don't know what knowledge can really be gleaned from this piece. Walt Disney's claim to fame were some of the incredible risks that he took, and his near Jobsian ability to predict what the consumer wanted.
Taylor Swift's claim to fame is that she is an attractive white woman from affluent parents, who is both highly malleable and a very hard worker.
This emotive nonsense doesn't jive with n+1.
edit: https://en.wikipedia.org/wiki/Taylor_Swift#Early_life
This is the kind of opportunity that less affluent—let alone poor—families don't tend to have.
I don't think you understand Taylor Swift whatsoever.
It is such a harmful fallacy to reduce someone's life work life you have done here.
Im in the "fathers and daughters" camp that Ben Thompson talks about, where over the last ~5 years, Taylor has produced a body of work that is broadly appealing. I enjoy it. My daughter enjoys it. I personally cannot stand Swift's earlier work, seeing as it was written for teenage girls, that makes sense, my daughter loves it, and she cannot stand my weird 90s rock, so we compromise on Swifts new stuff. What Taylor Swift has done, shifting her musical appeal without abandoning her fan base, is super impressive and potentially unprecedented at this scale. Maybe Michael Jackson or Elvis level of mastery of entertainment.
You're clearly missing something, because she's many orders of magnitude more successful than nearly every other attractive white woman, etc. No one falls up from mediocrity that meteorically without unique expertise.
I encourage you to write a song on an instrument, and play it at an open mic; you'll remember those annoyed and disappointed faces forever.
Swift's success is about much more than that. Fundamentally, she is targeting a market segment her competitors have left wide open. Her persona-- a hard working, self-deprecating, people pleasing young woman trying to navigate relationships--is immensely relatable to a huge number of young millennial women. That's especially true because Millennials are just more square than Boomers or Gen X. They are more inclined to follow social expectations, and have fewer vices than Boomers or Gen X at the same age. Swift's clean lyrics thus stand out in comparison to her contemporaries.
That also makes her more appealing across generations. I've been a Taylor Swift fan since the beginning, and I'm happy to spend $$$ taking my 10 year old daughter to one of her concerts. I'd never do the same with someone like Ariana Grande or Lizzo or even Beyonce, whose music is more sexualized and profane.
You should watch Miss Americana. Swift runs her operation like a business. It's quite amazing to watch.