By now you’ll likely have seen yesterday’s news that Taylor Swift has signed to Universal Music Group, a month after the end of her contract with longtime label Big Machine. It’s a multi-album, agreement with UMG globally (and its Republic Records in the US) described as Swift’s “recorded music partner”.
Swift gave more details on that in an Instagram post, describing it as “incredibly exciting to know that I’ll own all of my master recordings that I make from now on” – thus licensing them to UMG. This is going to be something we’ll see more of: for all the talk of how musical megastars can work directly with streaming services, many will still choose to work through labels – but the fact that they *could* go direct is an incentive for the deals to skew more towards artists’ desire to own their masters.
Swift also claimed yesterday that as part of the negotiations with UMG “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”. The key words here are “non-recoupable” (UMG was never going to try NOT to distribute some of its Spotify windfall to artists) and “much better terms” than rivals.
It’s also worth asking what the news means for Big Machine, which is up for sale at a reported valuation of $300m – with UMG the only major label thought to be bidding against private-equity firms. Big Machine was expected to try to re-sign Swift, which might lead you to think this week’s announcement is bad news for its big-exit prospects. The question will be what kind of valuation Swift’s back catalogue – which Big Machine still owns – carries.