Album cover Fearless (Taylor's Version)
Translated from a thread of tweets from user ThatsMauvelous , who claims to be a law student .
In 2005, the ambitious 13-year-old country singer Taylor Swift signed a recording deal with the newly emerging ambitious Big Machine Records.
Under this agreement, Swift transferred ownership of the recordings of her first six albums (which were yet to be recorded) to Big Machine. Swift recorded these albums from 2006 to 2017. They were hugely successful, and Swift and Big Machine flourished.
When the deal came to an end, Swift and Big Machine had brief negotiations, but were unable to come to an agreement on further recordings. It is said that the stumbling block in the negotiations was that Swift wanted to buy the rights to six already recorded albums.
In 2019, Swift signed a new deal pledging to release new albums through Republic Records, leaving Big Machine a thing of the past. The Big Machine label was small, and Swift became the big fish in their shallow pond.
Big Machine still had the rights to own the singer's first six albums with unlimited duration, but in the absence of a current contract with Swift, the label was just a small company with a large, but by and large, ballast asset on the balance sheet.
In 2019, Big Machine Records was acquired by Ithaca Holdings, which is headed by Scooter Brown., an entrepreneur from the music industry. The financial side of the transaction was provided by the private investment company Carlyle Group. The deal was rumored to be worth $ 300 million.
I don't know how much of that $ 300 million can be attributed to the rights to Swift's first six albums. I have seen estimates ranging from $ 100 million to $ 200 million, and I think they are plausible. By comparison, the Beatles' recording rights are valued at over a billion dollars.
I would be very interested to know how this transaction was envisioned in the Carlyle Group. How was their procedure for drawing up an objective view of the investment object, including risk assessment ("due diligence", or "due diligence"), was set? What risks did they see in relation to the cost of recordings from Swift's past albums?
Whatever the procedure, I suspect that what happened next surprised them greatly. Swift immediately denounced the deal, hinting that Big Machine's managers rudely denied her the opportunity to buy her own albums.
I think a similar reaction from the artist in such a situation was to be expected. However, Swift went further and started doing real harm: she began to block the use of all her past albums in films and advertisements.
But wait a second - if her old records don't belong to her, how can she block them? Here's how: To use a recording of a song in a movie, filmmakers must first acquire two types of licenses for it. First, you need to buy a sync license. Such a license is issued not for a specific recording, but for the abstract idea of the song itself.
A sync license must be purchased even if the movie does not use an existing recording. Does a movie character pick up a guitar, play it, and sing a song? To embed this into a movie, you need a sync license.
Second, if a filmmaker wants to use an existing recording of a song for which he has already acquired a sync license, he needs to purchase another "master license" from the owner of that recording.
Swift has acquired the recording rights to Big Machine, so Big Machine may license the use of the master. However, the song author owns the sync rights. This is where the Carlyle Group's troubles stem from.
Who wrote all the songs on the first six Taylor Swift albums? That's right, Taylor Swift. The recordings of these songs do not belong to her, but she owns the rights to the songs. And she just made it a rule to refuse all sync license requests.
In this way, Swift has already caused significant damage to the owners of her own recordings. But now she has gone even further: on April 10, she released a completely new recording of the 2008 album Fearless .
She can do this without Big Machine's consent because she owns the rights to the songs themselves. And new records of old songs are released by Republic Records under a contract, according to which the singer reserves all rights to new records.
I would like to note from myself that the new version of the album turned out to be excellent. It retains the spirit of the old, but offers more developed and improved Swift vocals. Also, the mixing of the new version of the album in the wake of the ended loudness war turned out much better.
Swift now owns the recording of the Fearless album. When those who want to buy licenses come to her, she will be able to offer them a license for both synchronization and use of the new recording wizard, which completely excludes Big Machine from the equation.
I'm very curious - how can you pay a nine-figure amount for a back catalog of an artist of this caliber without losing all possible scenarios first? However, the situation could get worse.
We have already discussed the need for two licenses to use a song in a movie. This works in other areas as well. For example, when a song is wanted to be published on iTunes or Spotify, the rights must be purchased (and paid royalties) from both the songwriter and the owner of the record. A song license for a movie is called a sync license, and a “mechanical license” for vinyl, CD, or Spotify. Because.
And now that Taylor has released a new version of the Fearless album, could she start to refuse mechanical licenses to publicly sell the old version of the album, effectively taking it off the market? I see no reason why she cannot do this.
If Swift re-records all of his old albums and uses his songwriting rights to remove all old versions of the recordings from the marketplace, it would mean that someone's 9-digit investment in her back catalog is going to be bullied.
And I'm just wondering what happened at all? Apparently, the buyers could not figure out that their financial asset exists only at the mercy of Swift. And now she takes advantage of their miscalculation, destroying their asset both for the sake of money and for fun.
I can't help but wish her good luck.
In the comments, I was told that Swift cannot completely block the use of his old records. It may refuse to sell certain types of licenses, such as synchronization, but the law obliges it to sell some other types. But while she cannot ban them altogether, she can ban their use in films and on television, and she can release new recordings of old songs so that the former compete with the latter.
The new Fearless album is great and I'm looking forward to the new re-recordings.