https://currently.att.yahoo.com/finance/news/taylor-swift-scooter-braun-masters-150817230.html

Yahoo Finance

Prince's first manager: The Taylor Swift licensing dispute is 'almost funny'

Katie Krzaczek

Taylor Swift’s public battle for control of her master recordings highlights an industry-wide debate, one that most artists don’t have the capital or the platform to influence.

“It’s almost funny that Taylor Swift represents the old-school methodology,” Owen Husney, a music industry veteran and Prince’s first manager, told Yahoo Finance, noting the irony that arguably the most successful artist in this era is fighting industry practices that helped to build her empire. “The label is going to come and want what they gave you.”

Swift signed on as Big Machine Label Group’s first artist and released her first single under the label in 2005 at age 16. The six albums released under the deal became the crux of Swift’s public outcry after Big Machine was bought earlier this year by Ithaca Holdings. Ithaca is owned by industry heavyweight Scooter Braun, who manages acts including Kanye West and Justin Bieber.

The sale irked Swift, who claimed Braun and Big Machine's founder Scott Borchetta brokered the deal to purposefully control the superstar’s back catalog. She accused the pair of exerting “tyrannical control” over her work and of attempting to prevent her from using it in live performances.


The dispute has raised the issue of the artist-label relationship in the age of Spotify (SPOT) and music streaming, which increasingly empowers musicians to write, record, and upload a song independent of a label while attempting to build their own distribution and publicity.

“It’s really about people owning your creative work,” Husney said. “It could be abhorrent to to put in that amount of creative effort and then not being able to own and control your own masters. From the label’s point of view, they were just going by the model that they practiced.”

‘There’s a lot that labels can still provide’

The contract that left Swift without control over her early work is the industry standard. Artists sign over the rights to published materials in exchange for advances and the corporate muscle needed to promote an album, to finance a tour, to produce merchandise, and more.

“There’s a lot that labels can still provide,” an entertainment industry attorney with experience litigating rights disputes, who asked to remain anonymous to avoid disrupting ongoing cases, told Yahoo Finance. “An artist themselves can very rarely build up the infrastructure.”

Swift’s first album debuted in 2006, when the singer was 17 years old. In a little over a decade, Swift established an undisputed dominance in music and serves as an example of how to leverage the corporate strength of music industry to achieve success.


The singer earned $185 million in 2018, making her the highest-paid celebrity that year. Her latest album, “Lover,” debuted at No. 1 on Billboard 200, selling more copies in its first week of sales than the list’s other 199 albums combined.

And while Swift benefited greatly from the traditional infrastructure, her case has become a flashpoint for an industry reckoning with practices that have left many talented artists with little to show for their own success while labels flourished.

‘The record label will tell you they deserve it’

Husney, who discovered and mentored Prince in the 1970s, explained that the financial incentive of signing with a label is sometimes the only way for a musician to move forward on a creative project.

The catch for artists is that the label will claim the first monies a release brings in to repay the contract’s advance while also retaining the rights to the master recordings (and potentially licensing and publishing rights).

“The record label will tell you they deserve it because they took a big risk on you,” Husney said. “There are more people in any given year who have been struck by lightning than become superstars.”


The risk is what gives labels the insurance to collect on artists when they are successful, both at superstar level and on a smaller scale.

“I’ve been trying to understand the perspective of bands,” Chuck Daley, co-founder of the indie label Tiny Engines, told Yahoo Finance. “I could see how if you’re five years down the line and things are going really well and you’re getting successful... and you don’t own the masters — I can understand that .”

A musician who goes by the stage name Adult Mom recently settled a dispute with Tiny Engines after publicly complaining about the label allegedly withholding royalty payouts and the refusal to turn over the rights to the band’s master recordings.

“The whole dispute with Adult Mom comes down to late accounting, which I can’t make excuses for,” Daley said, conceding that Tiny Engines didn’t proportionally scale up its operations.


“In 2016, it became pretty apparent we were in over our heads when it came to accounting,” Daley added. “You have to remember it’s a business. One of the hardest things... is trying to learn about becoming a businessman. The 20-year-old in me that was into punk music doesn’t like that.”

While they differ in scale and scope, Adult Mom and Taylor Swift both felt compelled to publicly decry their labels to advocate for their work. Both situations also touch on a common artist complaint: Signing with a label is an overly convoluted process that is often supplemented in nondisclosure agreements to protect the label.

“If everyone knew how much an artist made, everyone would be arguing for more money all the time,” the industry attorney said. “It’s all somewhat purposefully obscured.”

Artists have leverage to negotiate

The business model is changing, though, as the internet changes how industries operate.

“In the future, you’re going to see artists who are creating stuff in their bedrooms and release it to the world to monetize it,” Husney said. In fact, that trend has already begun.

After a meteoric rise on Soundcloud, singer Billie Eilish inked a 2016 deal with Vivendi SA’s (VIVHY) Interscope that allowed for the release of songs individually on streaming platforms without being part of an album or EP. The singer, only 14 years old at the time, was disrupting industry trends. And at 16, Eilish signed a three-year co-publishing deal with Universal rather than a traditional record deal.


Eilish has since released her debut album, the 14-track “When We All Fall Asleep, Where Do We Go?” The album earned the singer six Grammy nominations this year, including Best New Artist, Album of the Year, Record of the Year, and Song of the Year. Eilish is the youngest artist to earn nominations in the top four categories, besting even Swift.

On the other side of the spectrum, being contractually tied to one company for such a long amount of time can be restrictive for the artist. This is what happened to Prince.

Prince was writing and recording more material than his Warner Bros contract allowed to be released, leaving the singer-songwriter frustrated. Despite efforts to eschew his contract by performing under a different name and recording what amounted to a second catalog of his work, his agreement with Warner Bros tied him down. His feud with the label waxed and waned at various times throughout the artist’s career.

The late pop icon consistently advocated for the rights of artists to maintain control over their creative output. Infamously, Prince performed at the 1995 Brit Awards — where he was named International Pop Music Star of the Year — with the word “slave” written on his cheek.

"When you stop a man from dreaming, he becomes a slave,” he told Rolling Stone in 1996. “That's where I was. I don't own Prince's music. If you don't own your masters, your master owns you."


Swift’s label agreement with Big Machine was set to expire in 2018, and the singer told label president Scott Borchetta she would be exploring other companies. Swift ultimately signed with Republic, an imprint of Universal. As part of the deal, Swift would retain control of her masters moving forward.

“Nowadays, artists need to use the leverage they have to allow for these kinds of changes,” the industry attorney said. “Shorter licensing deals, negotiating for masters — they’re not big, flashy changes, but if you have the right representation you can benefit” from them.

Furthermore, unless certain provisions were negotiated ahead of time, materials recorded under contract remain the property of the label even after the deal expires. That leaves how the material is used it in the label’s hands as opposed to the creator’s.

That is precisely what happened to Swift at the height of her career.

Taylor Swift accepts the Artist of the Year award at the American Music Awards on November 24, 2019. (Photo: REUTERS/Mario Anzuoni)
Taylor Swift accepts the Artist of the Year award at the American Music Awards on November 24, 2019. (Photo: REUTERS/Mario Anzuoni)
‘Master ownership deals last for decades and decades’

Swift is seeing the effects of an agreement that the superstar signed when she was a teenager.

“Master ownership deals last for decades and decades,” the industry attorney said. “When it comes down to the end of your career, those first few albums are what are the most important.”

As the landscape continues to shift, with artists gaining more agency over how their music is released and how deals are negotiated, Husney predicts that “the major record labels will be losing a big chunk of their revenues, and they will become more and more dependent on their back catalog of these masters.”

Given the circumstances, artists are now more reliant on touring than selling the music itself.

A case-in-point is Swift: Her 53-stop Reputation World Tour in support of the album of the same name grossed a total revenue of $345.7 million last year, her highest grossing tour to date.

“It used to be that you made all your money from recording,” Hunsey said. “Today, you make all your money from touring.”

Katie is an associate editor at Yahoo Finance. Follow her on Twitter.