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Swiftonomics: can Taylor Swift boost her record label’s share price?

Maybe not. Swift ‘moves the needle’, says Bank of America, ‘but only to an extent’

Taylor Swift's new album, The Tortured Poets Department, is breaking Spotify streaming records. Photograph: Jutharat Pinyodoonyachet/The New York Times

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Proinsias O'Mahony
Sun Apr 28 2024 - 13:22

You hear much about Swiftonomics these days, reflecting how Taylor Swift’s influence extends far beyond music.

Last year, the Federal Reserve credited Swift’s Eras tour with boosting the US economy, while one analyst said if she were an economy, she would be bigger than 50 countries.

With her new album The Tortured Poets Department breaking Spotify streaming records, the question arises: can Swift move the share price of her record label, Universal Music Group (UMG)?

Maybe not, suggests Bank of America (BofA). Despite her huge success, BofA estimates Swift contributes just 2-3 per cent of UMG’s total revenue.

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Unlike most musicians, Swift retains ownership of her master recordings, entitling her to a larger share of royalties. Additionally, Swift is big with buyers of physical music formats, which usually comes with lower margins.

Overall, UMG is “less hit driven and dependent on a single artist than perceived”, says BofA, with external market factors like subscriber growth and price increases more significant drivers for the stock price. UMG reports earnings on May 2nd, but Swift’s new album may be a bigger deal for fans than investors. Swift “moves the needle”, says BofA, “but only to an extent”.

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