Taylor Swift (Acquired’s Version)

Not only is Taylor Swift the biggest music artist of our generation by nearly every metric (it’s not even close!), with the re-recording of her original albums she’s in the process of reshaping the entire music industry in a way no band or artist ever has before. And oh yeah — she’s still *only thirty-two*. We dive into the incredible business story behind perhaps the new “last great American dynasty”… the TSwift empire. *Links:* - Taylor Swift The Brightest Star: https://www.amazon.com/Taylor-Swift-Loves-Global-Sensation/dp/1912587556/ - All You Need to Know About the Music Business: https://www.amazon.com/Need-Know-About-Music-Business/dp/1501122185/ - Switched On Pop: https://switchedonpop.com/episodes/deja-vu-olivia-rodrigo-copyright-decoder-good-4-u-paramore - Joni (Blue) vs. Taylor (Red) Album Art: https://gaylorlyrics.tumblr.com/post/624477640229863424/we-3-some-joni-mitchell-parallels - Kelly Clarkson’s suggestion to re-record Taylor’s Big Machine albums: https://twitter.com/kellyclarkson/status/1150168164853882880?s=20 - Episode sources: https://www.acquired.fm/episodes/taylor-swift-acquireds-version#sources *Carve Outs:* - The Beatles Get Back: https://www.disneyplus.com/en-gb/series/the-beatles-get-back/7DcWEeWVqrkE - Italic: https://italic.com/ *More Acquired:* - Get email updates https://www.acquired.fm/email and vote on future episodes! - Join the Slack http://acquired.fm/slack - Check out the latest swag in the ACQ Merch Store https://www.acquired.fm/store! _Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions._

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Ben Gilbert?

  You're looking very good in that scarf, sir.

• 0:02David Rosenthal?

  Ah, as are you, fine sir.

• 0:05Ben Gilbert?

  Had to bust out the red scarf.

• 0:24Ben Gilbert?

  Welcome to season 10, episode one, the season premiere of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs and our venture fund, PSL Ventures.

• 0:41David Rosenthal?

  And I'm David Rosenthal, and I am an angel investor based in San Francisco.

• 0:47Ben Gilbert?

  And we are your hosts. She is Billboard's Woman of the Decade. She was the first woman to ever win the coveted Album of the Year Grammy twice, and now she's won it a third time. She was the highest-paid celebrity in the world in 2019, more than Kanye, LeBron James, Roger Federer, or even Beyonce. Her fanbase is so passionate, and she's accumulated so much power, that she is leveraging it to reorganize the power dynamics of the music industry in front of our very eyes, taking it back for artists and, of course, standing up for women everywhere. You knew her when she was 15, 22, and now she's accomplished all of this at the still

• 1:30Ben Gilbert?

  unbelievably young age of 32.

• 1:33David Rosenthal?

  That was good. I like that. I like that.

• 1:38Ben Gilbert?

  You probably know her all too well. She's maniacal.

• 1:41David Rosenthal?

  Come on, okay, okay.

• 1:44Ben Gilbert?

  You could even say she's fearless, a mad woman, or, David, or that she'll never go out of style. Today, listeners,

• 1:53David Rosenthal?

  That is true.

• 1:55Ben Gilbert?

  we are telling the story of the business of Taylor Swift.

• 1:59David Rosenthal?

  I have a fun little thing I wanted to do. I thought we should guess each other's favorite T-Swift album.

• 2:04Ben Gilbert?

  Ooh, let's see. I think...

• 2:10Ben Gilbert?

  Yours used to be 1989 and now it's Reputation.

• 2:16David Rosenthal?

  Ooh, oh, man, Reputation is so good. I did not like it at all before starting the research for this and now I am such a fan. But no, 1989 is my number two. My number one is Fearless.

• 2:30Ben Gilbert?

  Fearless, an uncommon pick, my friend.

• 2:32David Rosenthal?

  I know, I love it. I just love it. So good. And the song, Fearless, so good.

• 2:38Ben Gilbert?

  All right, what's mine?

• 2:39David Rosenthal?

  I think yours is 1989.

• 2:41Ben Gilbert?

  Mine was 1989 and I am an Evermore, or a Folklore fan now.

• 2:44David Rosenthal?

  Oh, oh, and Folklore over Evermore.

• 2:47Ben Gilbert?

  You can't put Bon Iver on an album with Taylor Swift and expect me not to just immediately like the whole album the best. All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 3:12David Rosenthal?

  Yep. Your risk surface changes every week now. A vendor turns on an AI feature or someone writes in a new model without telling IT and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 3:33Ben Gilbert?

  Right. And that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 3:55David Rosenthal?

  In half, which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor, and Snowflake all stay audit-ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 4:13Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance. And the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/ acquired. That's V A N T A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you. We also want to tell you, listeners, that if you are new to the acquired community, you should make it official. Join the over 11,000 smart people at acquired.fm/slash/Slack. Most of you know this, but we also have a second show called the LP show where we cover nerdier, deeper topics on how to raise venture

• 4:58Ben Gilbert?

  capital, things like that. Recently, what's going on with the very cool startup Italic, which brings manufacturers directly to consumers. You can get access to that by searching acquired LP show in the podcast player of your choice. And without further ado, David, take us in and listeners, as always, the show is not investment advice. David and I may have investments in the companies that we discuss in the show is for informational and entertainment purposes only.

• 5:25David Rosenthal?

  We may own a few music securitization deals out there. I don't know if we would recommend. We're at the end of the episode. We'll, we'll decide if we recommend buying into music master securitization deals or not. Amazingly, this is was like shocking to me. There is no official, like big book biography out there about T. Swift, but there is actually quite a good book out there. It's unofficial, of course, but it's really well researched by a man named Michael Francis Taylor, who is a Brit, and it is called Taylor Swift, The Brightest Star. And it was formed the backbone of a lot of the research here and story. So big thank you to Michael

• 6:09David Rosenthal?

  for writing it. Okay, on December 13th, 1989, lucky 13, at the Redding Hospital in West Redding, Pennsylvania, not far from where both of us were born and spent our childhood years.

• 6:26Ben Gilbert?

  The wonderful southeast Pennsylvania Delaware region.

• 6:29David Rosenthal?

  A baby girl, one Taylor Allison Swift, is born to parents Scott Kingsley Swift and Andrea Gardner Swift, maiden name Finley.

• 6:42David Rosenthal?

  So her dad Scott is a stockbroker for Merrill Lynch.

• 6:48Ben Gilbert?

  That's sort of all I ever heard on him too.

• 6:50David Rosenthal?

  Based on what I could find out, he comes from like a long line of wealthy sort of Philadelphia area family. If you've seen kind of like the Philadelphia story, like he was born on the main line in Bryn Mawr, like his great grandfather, so Taylor's great, great grandfather was a guy named Charles Baldi, who was an Italian immigrant, came to Philadelphia in 1877. You know, we gotta go back to the 1800s because it's quiet. We can't just start at 1989.

• 7:20Ben Gilbert?

  Of course.

• 7:21David Rosenthal?

  And he opens a coal yard in the Philadelphia area, supplying the railroads and becomes like one of the biggest.

• 7:29Ben Gilbert?

  Oh, wow.

• 7:29David Rosenthal?

  Coal magnets for railroads in the Philadelphia area. So he makes a fortune. He invested in newspapers. He invested in banks. He like, like stocks of banks. He buys a ton of Philadelphia area real estate. Let's just say the family has a lot of properties. Speaking of her mom, she also comes from quite an interesting family. Before having Taylor, Andrea had worked in marketing for various financial services firms and then decided to stay home to be a mom to Taylor and, and her little brother, Austin. But Andrea's childhood was pretty unique and her mom, Marjorie, had quite a different path.

• 8:11Ben Gilbert?

  Marjorie was an opera singer, is that right?

• 8:14David Rosenthal?

  And more. So Andrea's dad, Robert, Taylor's grandfather, was the CEO of an engineering company that did a lot of work in the South and particularly in the Caribbean. And so when Andrea was growing up, they lived like all over the country and spent a lot of time in Cuba before the revolution and then in Puerto Rico.

• 8:36David Rosenthal?

  And her mom, Marjorie, had a college degree in music, which was pretty rare at that time. Yeah. I think she was born in like the twenties, I want to say. And while they're living in the Caribbean, in Cuba and Puerto Rico, she, and I believe Andrea was already born at this point in time, she decides that she wants to like, become a professional singer. She gets her own TV show that she hosts and she's selling out clubs, performing shows. She sang opera. She wasn't just an opera singer, she also sang pop tunes as well. And sort of like Taylor to come, not just a country singer, also sang the pop tunes. Anyway, Marjorie, and I believe also Robert, eventually end up moving in with the family,

• 9:20David Rosenthal?

  the Swift family in Redding and live with Taylor and obviously have a big influence on her. So by age three, Taylor clearly has gotten the musical gene from Marjorie. She's into singing. The family also has a beach house naturally at the Jersey Shore at Stone Harbor. And supposedly Taylor would just like go up to strangers on the beach and start singing to them. She has this great quote, "My parents have video of me on the beach at like three, going up to people and singing Lion King songs for them. I was literally going from towel to towel on the beach saying, hi, I'm Taylor. I'm going to sing. I just can't wait to be king for you now."

• 9:59David Rosenthal?

  When she is six, a few years later, her parents buy her her first album, which is LeAnn Rimes. Remember LeAnn Rimes? Oh, no way. So through LeAnn, of course, Taylor gets into country music. And how perfect is this? What is country music? The defining characteristic of country music is storytelling. So perfect for Taylor. And she pretty quickly discovers Shania Twain, who in addition to being-

• 10:29David Rosenthal?

  Awesome and a great country artist, wrote all of her own songs.

• 10:34Ben Gilbert?

  Hmm.

• 10:35David Rosenthal?

  So she decides, why can't Taylor do this as well? So she starts going to local venues, coffee shops, bars, doing open mic nights, karaoke. And it turns out that one of her regular karaoke venues in the Reading area is a roadhouse just outside of town owned by former country star, Pat Garrett. He's kind of the only country star in the area. So at his roadhouse, he would have pretty big acts come through when they were in town, like Charlie Daniels or George Jones and the likes. And if you won karaoke night, you'd get to open up for these acts.

• 11:16Ben Gilbert?

  Hmm.

• 11:16David Rosenthal?

  So Taylor just starts hanging around. She has a great quote, she says, I was kind of like an annoying fly around that place. I just would not leave him alone.

• 11:25Ben Gilbert?

  How old is she here? 10, 12, 13?

• 11:27David Rosenthal?

  Yeah, 10.

• 11:28Ben Gilbert?

  An enormous amount of parental support for a 10 year old to be a fly hanging around someplace, you know?

• 11:34David Rosenthal?

  It's interesting. I was thinking a lot about this and people talk about Taylor was in many ways sort of born, standing on third base and had all this privilege and support from her parents. Absolutely true. On the other hand, it's also pretty rare for anybody and often especially people from wealthy families to have like that kind of level of ambition. Like her parents weren't pushing her to doing this, they were supporting her, but like she was absolutely the one that was driving like, I'm gonna do this. I'm gonna go be Shania Twain and LeAnn Rimes.

• 12:08Ben Gilbert?

  I mean, it shows up her entire career that she has a chip on her shoulder, that no level of accomplishment is ever enough and she needs to set her sights on the next thing. I get the sense she's the type of person who has trouble celebrating wins before immediately focusing on whatever's next. And that you cannot manufacture.

• 12:25David Rosenthal?

  Okay, so she's singing at the roadhouses, she starts getting on the national anthem circuit locally, she sings the national anthem for the Reading Phillies, the local minor league baseball team.

• 12:36Ben Gilbert?

  So it begins.

• 12:37David Rosenthal?

  So Taylor, one night, is watching the VH1 Behind the Music on Faith Hill. And the story goes, and she is watching this and realizes that, oh.

• 12:51David Rosenthal?

  Nashville is where Faith Hill was signed and discovered and all these artists, all these country artists, they're all based out of Nashville. So she says, I got it into my head that there was this magical land called Nashville, where dreams come true, and that's where I needed to go. I began absolutely nonstop tormenting my parents, begging them on a daily basis to move there. So of course I read this and I'm like, huh, I wonder why Nashville is the epicenter of country music. I mean, it makes sense. It's in the South. It's popular in the South. But why Nashville over Memphis or someplace else?

• 13:24Ben Gilbert?

  On every other episode that we talk about on this show, when we're talking about tech businesses, this is the part where we're talking about Silicon Valley. And it's amazing that we have a completely different version of that in the country music scene.

• 13:34David Rosenthal?

  Not only country, but bluegrass, like all of it. Nashville is the epicenter. So it turns out that the reason for this is that there was an insurance company based in Nashville. This is wild. You can't make this up.

• 13:47Ben Gilbert?

  What?

• 13:48David Rosenthal?

  There was an insurance company based in Nashville in the 20s called the National Life and Accident Insurance Company. And their slogan was, "We Shield Millions." And they decided that as a marketing stunt, they were going to go buy a local radio station in Nashville and change the call sign of the radio station to WSM and have it be like, "We Shield Millions Radio." So they do this. And one of the things they start doing with the radio station is they do live barn dancing that they broadcast on the radio station on Saturday nights. Because I know people are like, this is, where are you going with this?

• 14:29David Rosenthal?

  It becomes so popular. They're like, oh, we gotta build a venue for this and let's make it a show. And let's like really go all in as if we're getting tons of customer acquisition through this. So they build what becomes the Grand Old Opry. For this show, this insurance company. And that then becomes like the venue for sort of early country style music and like Johnny Cash, Dolly Parton, Hank Williams, like they all come up in Nashville. And so that's why Music City Nashville is the place to be.

• 15:03Ben Gilbert?

  Wow, I love how random. I mean, it's, it's not that it's random. It's complexity theory. It's that there is so many factors that go into something that this sort of unpredictable event of this insurance company sponsoring a radio station to this huge amount is like, it serves as enough of a catalyst to bring together surely a movement that was already happening, but to happen there.

• 15:31David Rosenthal?

  Yep. Okay, back to Taylor. She finally wears down her parents who say, well, we're not going to move there, but like maybe on a school break, yeah, why don't, why don't you record a demo and we'll go down to Nashville, we'll drive around and we'll take it to some labels and we'll, we'll see what happens. So in March 2001, Andrea takes Taylor down to Nashville. She comes back to Pennsylvania, empty handed, no record deal, surprise, surprise, just walking into offices on her own, didn't get her deal, but she's undeterred. This is Taylor Swift we're talking about.

• 16:08David Rosenthal?

  And the next year in 2002, she gets the chance to sing America, the Beautiful at the US Open in New York.

• 16:19Ben Gilbert?

  Slight twist on the national anthem. You know, it's, she's, she's branching out from her single song.

• 16:23David Rosenthal?

  So amazingly, like the strategy, it works, it works. In the audience, in attendance at the open is a talent agent in New York named Dan Di Mertro, and he hears her sing. He's part of Britney Spears's management team. And he's like, huh, that girl's got talent. So he gets in touch with the open organizers. He calls her up, he gets in touch with her family and signs her as a client. And so Taylor's like, oh, okay. Great. I got an agent now. They then go back down to Nashville, back down to Music Row. Dan walks her into all the studios.

• 17:02Ben Gilbert?

  This is like the big three record labels' second office that's in Nashville, right? They have Nashville-specific offices for country.

• 17:09David Rosenthal?

  Yep. And some of them, it's, you know, it's very much like the movie industry. Like, some of them, it's, you know, Capitol Records, Nashville, or, you know, whatever. And some of them, they have other labels.

• 17:21Ben Gilbert?

  Oh, if you go look up Universal Music Group, you can see that there's 1,000 labels within, you know, UMG.

• 17:28David Rosenthal?

  And I think for a lot of these big label groups, they'll even have competing, you know, wholly owned labels. So there might be two or three or four RCA labels in Nashville or in New York or in Hollywood.

• 17:43Ben Gilbert?

  Yeah.

• 17:44David Rosenthal?

  So this time, once again, Taylor does not get a record deal, but RCA offers her a development deal, which, you know, is not, the record deal obviously is like, hey, we're gonna invest resources in you and make a record that we're then gonna release and we'll get it on radio and see how you do. A development deal is like, we think you have potential. We're not ready to commit to a full record. It's like a small check from a venture firm, you know, like, we'll participate in the round. We're not gonna lead it, though.

• 18:19Ben Gilbert?

  And I assume there's, it's like limited investment, but kind of limited upside. And it's more about making sure you have relationships with the right people and we can keep an eye on you should you start to really shine.

• 18:29David Rosenthal?

  Exactly. And I assume that there's also a rofer on an actual deal in there. But as folks may know, Taylor does not end up signing with RCA, so we'll have to see how that plays out. On the back of this, though, this is the ammunition she needs with her family to be like, Mom, Dad, can we move to Nashville? So she's about to start high school in the fall. They do, you know, I mean, God bless them, her parents, they're like, okay, let's move to Nashville, which they do.

• 18:59Ben Gilbert?

  That is so crazy. It's probably like 0.1%, 0.01% of our audience out there is able to relate to that. Like, the parents moving for the kids.

• 19:11Ben Gilbert?

  Aspirations and career at this young of an age. I mean, it's extremely common to move for mom or dad got a new job or we want to be closer to family. Almost never is there a story in, you know, an ordinary person's life of the family picks up and move for the kid.

• 19:25David Rosenthal?

  Yeah. I mean, like it happens.

• 19:27Ben Gilbert?

  It's like the stuff of Olympians and future Taylor Swifts, you know?

• 19:31David Rosenthal?

  She's so freaking smart. I think she kind of realizes through this, both through her agent and now being in this world with this development deal. There are a lot of other people out there trying to make it. Like if you want to make it, you've really got to stand out and you got to have something great that makes you you. And for her, what's the natural thing? She would say all the time that she didn't think she had the best voice, but she was an amazing songwriter. So she doubles down on songwriting. She has this great quote, "When I first started writing songs, I was pretty lonely. I was about 12 and at school in Pennsylvania. I wasn't popular and I didn't have many friends and never

• 20:15David Rosenthal?

  knew where to sit at lunch, but songwriting became a release. I found that when I was alone a lot of the time, kind of on the outside, looking into their discussions and the things they were saying to each other, I started developing this really keen sense of observation of how to watch people and see what they did. From that sense, I was able to write songs about relationships when I was 13, but not in relationships."

• 20:38Ben Gilbert?

  It is so true. She's got these like love songs, you know, as a middle schooler that she's written. And it's so clear, both from her observing the world, but also like her watching TV and understanding common storylines from TV shows and movies about people falling in love, that she sort of writes country music inspired by the feelings that she thinks those people are having.

• 21:00David Rosenthal?

  And she's really freaking good at it. So word starts to get around Nashville that there's this girl who has a development deal and, you know, shows some promise as an artist, but she's a really freaking good songwriter. So in May of 2014, Taylor's still a freshman in high school and is 14 years old. Sony ATV, which is one of the big publishing labels, signs her to a songwriting contract as their youngest songwriter ever that they have ever signed.

• 21:34Ben Gilbert?

  So again, not a record deal, but she has a deal as a songwriter.

• 21:39David Rosenthal?

  And it could be songs for her, it could be songs for other people like that Sony doesn't care. They just want to publish her as a songwriter.

• 21:46Ben Gilbert?

  Hmm.

• 21:47David Rosenthal?

  So the CEO of Sony ATV Nashville says, this is a quote from the time, "She is among the few artists who are born with a gift that just rolls out of her. I still marvel at how this young girl with limited life experiences at that point could write such lyrics and melodies. She was born with it, that gift."

• 22:06Ben Gilbert?

  Wow.

• 22:07David Rosenthal?

  Amazing. So Sony pairs her up, like she's still, she's 14. They pair her up with a really established songwriter in the Nashville circuit, a woman named Liz Rose, who'd written for Tim McGraw and others. They of course end up becoming super close collaborators, but some songs that Taylor and Liz end up collaborating on that you might know. Tim McGraw, "Teardrops on My Guitar," "Picture to Burn," "Fearless," "White Horse," "You Belong With Me," and then, it's going to come up later, but their final collaboration. Do you know what it is?

• 22:44Ben Gilbert?

  No, I have no idea.

• 22:46David Rosenthal?

  "All Too Well."

• 22:48Ben Gilbert?

  Really?

• 22:49David Rosenthal?

  Yeah.

• 22:50Ben Gilbert?

  Wow.

• 22:51David Rosenthal?

  Taylor brings her back.

• 22:52Ben Gilbert?

  Current number one for Taylor Swift.

• 22:54David Rosenthal?

  Oh my gosh. Longest number one song in history. This is one of the most boneheaded, like, business move of any type. Like, I'm going back to like the Netflix blockbuster.

• 23:08Ben Gilbert?

  Blockbuster had it in the bag and should not have lost to Netflix. And due to shareholder agitation and executive reshuffling, was forced to make an unforced error.

• 23:18David Rosenthal?

  Yes, forced to make an unforced error. This is just a fully unforced error. RCA tells Taylor, they see what's going on and they're like, you know, we do like your singing. We think you're a talented singer. We're just not feeling your songwriting.

• 23:36Ben Gilbert?

  No way.

• 23:37David Rosenthal?

  Yes, yes. So they tell her they want to keep her in development for at least another year. They're not going to give her a record deal, but what they want to do with her in development, they want to have enough of this performing your own stuff.

• 23:51Ben Gilbert?

  Singer songwriter stuff. We'll feed you some good music and you can sing that.

• 23:55David Rosenthal?

  We will feed you teeny popper stuff. Oh my God.

• 23:59Ben Gilbert?

  I mean, it's just, it's this classic like underestimating young talent and it happens in every industry. And I think people are so used to watching the standard path that they sort of assume that if you're, you know, one of the greatest of all time, but you're super young, well, you should do what other super young people do, do the, you know, kids bop stuff. It's not kids bop, but that, that sort of thing. And so like, I mean, it's, it's almost this Taylor quote of, or the Taylor lyric of when you are young, they assume you know nothing.

• 24:26David Rosenthal?

  Literally, I've got a quote on this from her. "I didn't just want to be another girl singer. I wanted there to be something that set me apart, and I knew that had to be my writing. Basically, there are two types of people. People who see me as an artist and judge me by my music. The other people judge me by a number, my age, which means nothing. It's not really a popular thing to do in Nashville to walk away from a major record deal, but that's what I did. And what she's referring to is when RCA does this, she tells them,

• 24:56David Rosenthal?

  she tells them to go F off. She walks out on her deal.

• 25:00Ben Gilbert?

  So they're just stringing her along.

• 25:02David Rosenthal?

  Yeah, it's not like she walked out on a record deal, which I don't even know if she could have, if she'd signed it. She walks out on the development deal, but that's what she's talking about. Like this is crazy. Everybody's dream in Nashville is to make it. And having a development deal is a huge part of it. And she's just like, no, I've got a development deal with a major label, but I'm. They don't believe in what I want to do, so I'm walking out.

• 25:26Ben Gilbert?

  Hmm.

• 25:27David Rosenthal?

  So in brightest star, Michael writes, to understand RCA's decision, it to be as generous as possible to them here, is to better understand the shifting music landscape of the time. It was not exactly a golden age for country music. Teenagers were no longer buying into it in significant numbers, and the music coming out of Nashville was seen in some circles to be floundering and heavily reliant on its aging fan base. And that was definitely true. Like, there were, you know, shoot, we were both growing up at the time, like, what was like, the number one thing that kids would say all over the country about the music they like? I like anything but country. Don't like country.

• 26:05Ben Gilbert?

  Yes, there was a lot of alternative rock. Hip hop was sort of graduating out of what hip hop had been in the 80s and 90s and becoming more pop, but it was still like, heavy alt rock.

• 26:14David Rosenthal?

  Yep. And so RCA is kind of like, look, we've got a 14, 15 year old who we do think has talent as a performer, we're a country music label, she wants to write her own music. Obviously, that's going to be aimed at teenagers, but teenagers don't listen to country. We need to change this up here. So this is such a acquired theme that we see all the time. Like, is it that there was something inherently wrong with country music? Or to its nature that made it not appeal to teenagers, or et cetera? No, of course not. It's just that nobody was making country music for teenagers at the time.

• 26:55Ben Gilbert?

  I remember thinking like, well, I'm not like a country type of person. And so it was less about the music itself and more about, do I identify with the type of person who I perceive to listen to that thing? And it's the same with any other sort of music. It's often the same with movies, too. It's a, it's a form of like self identification and community building that just so happens to sound like this.

• 27:19David Rosenthal?

  I think that's right. Well, what this makes me think of is like, the auto industry and Tesla, right? Like, before Tesla, it wasn't like, cool to be a, at least in Silicon Valley, to be like, a car person anymore. Like, everybody drove a Prius, because like, oh, I don't care about cars, you know? But was it that really, like, cars weren't something that could be part of people's lives in the same way anymore? Or just that nobody had made a car targeted at that demographic?

• 27:47Ben Gilbert?

  Right. That you could use to signal within your community.

• 27:51David Rosenthal?

  Yep. So.

• 27:54David Rosenthal?

  T. Swift decides in her own inimitable fashion that she's going to host her own audition this time. So rather than going back on the circuit out to all the labels now that she's a free agent, she books the Bluebird Cafe in Nashville, which is like a legendary venue and was where Garth Brooks was discovered. She invites all the label execs in town to come see her perform.

• 28:23Ben Gilbert?

  She's the Michael Ovitz of the teen country music industry in Nashville, right? She's like holding an auction for her herself rather than trying out.

• 28:32David Rosenthal?

  So one of the execs who shows up, and it was, I think, apparently well attended, is a man named Scott Porchetta.

• 28:42Ben Gilbert?

  Ah.

• 28:44David Rosenthal?

  Scott is an executive at, you know, one of Universal's sublabels in Nashville, and he's planning to leave Universal and start his own label. So he finds Taylor after the show and he pitches her and says, hey, like, I want to sign you and I want to sign you to a real record deal. I want to make an album with you. I'm about to leave Universal, though, and start my own indie label, and I want you to take a risk on me. And I really believe in you. I believe that you can write your own songs. You can make country music for teenagers. Like, I think this is really going to work. And Taylor doesn't agree right away. It takes a little bit of time of Scott pitching her and her family to do this, but

• 29:29David Rosenthal?

  they decide to do it. Taylor has this quote, "You can tell when someone just really gets you. The best part of getting a record deal wasn't just that it was a record deal, it was the right deal for me. I'm with people I believe in, and they believe in me."

• 29:45Ben Gilbert?

  To underscore how much of a chance they were taking on each other, Taylor Swift was Scott's new label, Big Machine's very first client. So both of them taking a chance on each other.

• 29:58David Rosenthal?

  Yep.

• 29:58Ben Gilbert?

  And I don't know if it was in conjunction with doing this record deal or a little bit before, a little bit after, but there's another transaction that happens between the Swift family and Big Machine.

• 30:10David Rosenthal?

  Right. Scott Borchetta needed some financing to get this off the ground. Like it costs money to make an album, to distribute an album.

• 30:17Ben Gilbert?

  Right.

• 30:18David Rosenthal?

  So where does he get the money? Well, one place he gets it from a minority investor is Taylor's dad.

• 30:26Ben Gilbert?

  Hmm.

• 30:27David Rosenthal?

  The Swift family invests $120,000 in Big Machine for a 3% stake in the label.

• 30:35Ben Gilbert?

  Three-ish. It's been reported in a few different 3%, 4%, but somewhere in that ballpark.

• 30:40David Rosenthal?

  Somewhere in there. Call it 2% to 4%. The majority of the outside capital though comes from, I don't think this has been talked about that much. This blew my mind when I figured it out. I think I already told you who it comes from. Comes from Toby Keith, the like big country singer, who apparently is like a huge business mogul in Nashville and in the business of country. There's a big Forbes article from a couple of years ago, talking about how he's worth like half a billion dollars.

• 31:10Ben Gilbert?

  He's been a super, super savvy business person outside of his musical career.

• 31:15David Rosenthal?

  So Toby invests the majority of the money to get it going. And Big Machine does a distribution deal with Universal, with his former major label for distribution. And they're up and running.

• 31:30Ben Gilbert?

  Yep. Because history has been so antagonistic between Big Machine and Taylor, based on what would end up happening, which we will definitely get to. It is worth underscoring.

• 31:43Ben Gilbert?

  She didn't have a record deal, and this was a person who was willing to give her a record deal on an unproven artist. And I think in the same way that we would need to throughout this entire episode, advocate for the rights of the artist and the person really creating something that people love, there is also real value in the world in taking a chance on someone. Now, that doesn't mean you have infinite upside from taking a small chance once, but it is worth recognizing that this was a risk.

• 32:14David Rosenthal?

  Right.

• 32:14Ben Gilbert?

  David, do you think this is a good area to do a little sidebar on how music licensing works?

• 32:21David Rosenthal?

  Absolutely. Like, what does it mean when Taylor signs this record deal?

• 32:26Ben Gilbert?

  So this has been a fun side project for me over the last few weeks, diving into all of this. The thing to keep in mind as you listen is to remember the purpose of copyright law is to spur innovation and creativity. This is true across copyrights, this is true across trademarks, patents, IP in general. So keep thinking back on this purpose to spur innovation and creativity as you hear the whole rest of the episode. And keep thinking back, are these laws being used as intended? So there are a few really great sources on this if you're interested in learning more. The first is an excellent crossover podcast between The Verge and Switched on Pop, which we'll link to in the show notes.

• 33:08David Rosenthal?

  Yeah, Switched on Pop, so good.

• 33:11Ben Gilbert?

  The other is a book from the legendary music attorney, Don Passman, on the music business, which is on its 10th edition. That's how many sort of revisions there have been based on all these changes recently. But two big things to remember here. When a piece of music is created, there are two copyrights that come into existence. The sound recording copyright, the first one, which is also called a master recording or a master, which traditionally is owned by the record label. So this is literally what it sounds like. It is a copyright on the literal recording of the music that they did in the studio, the way it came out and can be heard by your ears. And historically, a label takes ownership of these masters or recording copyrights in exchange for assuming

• 33:56Ben Gilbert?

  the financial risk of betting on distributing, promoting the artist's work. So that's the first copyright.

• 34:04David Rosenthal?

  It feels like the old school venture capital industry to me, like when, you know, back in the- 80s, 90s, 70s, when the investors would take the majority of the company for putting up the money to do it.

• 34:18Ben Gilbert?

  Yes. And ultimately, everything's a market. So it's just determined by supply and demand and market terms that need to be agreed upon in order to take the appropriate risk. And as you were stating with the venture capital industry, the market terms have changed tremendously to take that type of risk because the appetite for capital, because of the returns that can be generated.

• 34:37David Rosenthal?

  But in the music industry, there are essentially only like three labels when you get down to it. And there are a lot of people who want to be stars.

• 34:44Ben Gilbert?

  So the second one is the musical composition copyright, or the publishing right. And now, these are like the written lyrics and the melody, and they're traditionally held by the songwriters themselves through their music publishers. The way you can kind of think about this, sort of the idea and the execution, the musical composition copyrights, it's kind of like something you could put down on sheet music. This is like the idea of the song, but you haven't actually played a note. And then, once the notes are played and recorded, that's the, that's the master. So back now to the musical composition copyright. I mentioned these can be held by songwriters, but usually through a music publisher. The publishers tend to deal with these composition copyrights the same way that the music labels

• 35:28Ben Gilbert?

  deal with the masters. And historically, these publishers would take 50% of the royalties that come through the composition copyright. But today, they actually take a lot less. So for bigger songwriters, it might just be that the songwriter pays the publisher a fixed fee to do some back office stuff. So for all intents and purposes, you can think about it like the songwriter themselves owns their own musical composition copyrights, the publishing rights, and they, they can make the decision on whether or not they want to license that for specific purposes. And a quick aside on publishers, even though they don't have a lot of relative power today to like the labels or big stars, they used

• 36:10Ben Gilbert?

  to be insanely powerful in the era before recorded music, when the publishing rights were the major rights.

• 36:16David Rosenthal?

  Oh, right. The sheet music was like it.

• 36:19Ben Gilbert?

  Exactly. Since the singers didn't used to be the same as the songwriters and that meant that the artists and the recording labels were like totally at the mercy of these publishers who owned the sheet music rights, which is like a fascinating little walk down history. And so these are the two big building blocks upon which everything else is built. Some uses of music require one of these approvals and some other use cases require both. So there's sort of two different parties. Whoever owns the sound recording, master right, and whoever owns the publishing right, both sort of have a veto right on who can use the final product for the use cases that do require both. And depending on the use of the music,

• 37:03Ben Gilbert?

  the splits and the income that is generated are wildly, wildly different. So one little final thing here, just because it might be sort of hanging in your head. What about co writers? Well, songwriting credits, interestingly enough, can be split any which way and are privately negotiated by the songwriters with each other. So it's possible that for some types of approvals that require the publishing license, there might be multiple people who wrote the song together that each have to sign off for that use case. And the money can flow in totally unique ways, too. So it could be 50 50, it could be 90 10, it could be a flat fee. Let's say Taylor brings a guest on who's someone you've never heard of. She may pay a flat fee or a 5% royalty or something.

• 37:45David Rosenthal?

  So like for Liz Rose and, you know, with All Too Well and Tim McGraw and the like, there's some deal between her and Taylor.

• 37:50Ben Gilbert?

  Right. But all independently privately negotiated.

• 37:53David Rosenthal?

  Interesting. So you said at the time, typically the publishers would keep like 50% of the songwriting economics and the writers would keep 50%. Even that was very good from the artist's perspective compared to the splits with the labels on the master side, right?

• 38:16Ben Gilbert?

  Exactly. Yeah. When you sign a distribution deal where a record label fronts you the money, you make the album, they then own the master, your royalty stream, again, independently negotiated, but you only end up with like 10%, 15%. Maybe if you're a really big artist, you can get like 20, 22%. But the vast majority of those economics are going to the record label and This is where we should mention the idea of recoupment.

• 38:42David Rosenthal?

  Right.

• 38:43Ben Gilbert?

  You only get to participate in those revenues if you've recouped your...

• 38:47David Rosenthal?

  The advance, the cost.

• 38:49Ben Gilbert?

  Yeah, yeah, yeah. It's like an upfront advance.

• 38:51David Rosenthal?

  So it's like book publishing?

• 38:53Ben Gilbert?

  Exactly. And so if a record label signs a deal with you and they give you $500,000, well, it doesn't matter if your CDs are flying off the shelves or your Spotify streams are happening. For the first $500,000 that should be paid out to you, the record labels are going to keep that. And you only get to participate in your 10%, 15%, whatever it is, after you've recouped the advance.

• 39:17David Rosenthal?

  It's like a VC preference stack on a gap table.

• 39:21Ben Gilbert?

  It is literally exactly what it is, and I want to talk about that later.

• 39:24David Rosenthal?

  It's so Byzantine and it's so from just like a different era.

• 39:30Ben Gilbert?

  Right.

• 39:30David Rosenthal?

  The way it costs a lot of money to make an album and it costs an even more boatload of money to get it on radio and get distribution and get fans to do customer acquisition for it.

• 39:42Ben Gilbert?

  And more important than that, and this is, I think, what represents what's sort of like often perceived as a predatory deal. Most of these startups, most of these artists are going to fail. And the record labels or the book publishers or the VCs are going to have sunk all this money in to get to a point where we can even see if it's going to work. And when 90% plus, I don't know what the failure rate is in the music industry, but when 90% plus of startups fail, well, you need some kind of economic split so that the benefit of the winners that you bet on can more than make up for all of the losers that you bet on.

• 40:17David Rosenthal?

  Right, just like in a VC fund. But this is what now I think has completely changed.

• 40:23Ben Gilbert?

  Yes.

• 40:23David Rosenthal?

  Yes, all that's true in the old world where you gotta invest all this money before you know if somebody has an audience. All right. So back to T. Swift. So she and Big Machine, they start making the debut album. While they're making it, Taylor puts up a MySpace page. That's what all the teenagers are doing at the time. Well, look at that, going direct to her fans. Imagine that, going direct to her fans. Even though she's not on the radio, even though nobody's spending any money here. She also chooses, you know, for the production, again, like Scott and Big Machine, they've got real money, they've got Toby Keith behind them, they've got Universal, like, they have access to a lot of resources.

• 41:03David Rosenthal?

  Taylor's like, no, I want the guy who did my demo to be my producer, a guy named Nathan Chapman, who she has a great vibe with. And most importantly, she's like, no, I want to control this. Like, I want to control what this sounds like. I wrote these songs together with Liz, with a lot of them, but like, I'm the songwriter, like, I am in control here. So in June of 2006, they release the first single from the forthcoming album. It's Tim McGraw. Thanks to MySpace. She has 20 million interactions. Whoa, crazy. Then on October 24th, the album is finally released. And Taylor writes in the liner notes on the album, "I love everyone who has inspired me to write a song, whether you know it or not.

• 41:48David Rosenthal?

  I love anyone who has ever turned the volume up when my song comes on the radio. Anyone who has bought this album, anyone who can sing along to my songs when I play them live, anyone who's ever requested my song on the radio or even remembered my name. If you ever see me in public, I want to meet you. I will thank you myself. You have let me into your life, and I will never be able to thank you enough for that. I love you. I love God for putting you in my life." And then a little PS, "To all the boys who thought they were cool and break my heart, guess what? Here are 14 songs written about you."

• 42:24Ben Gilbert?

  Did she say that?

• 42:25David Rosenthal?

  She literally wrote that.

• 42:26Ben Gilbert?

  That's so funny. She knows where her power comes from.

• 42:29David Rosenthal?

  And her power comes from the fans who she's connecting with directly. I want to meet you. I want you to come up to me, say hi to me in public. I will thank you myself.

• 42:39Ben Gilbert?

  Watching what she did for the next 14 years after that in cultivating community on Tumblr is crazy. She has 27,000 interactions with fans on Tumblr over the years.

• 42:53David Rosenthal?

  Wow.

• 42:54Ben Gilbert?

  That is her personally liking or reblogging or commenting. Like she gets use social media to directly interact with my community.

• 43:03David Rosenthal?

  Yep. She's connected with teenagers all around the world on the internet. And what are they gonna do? They're gonna go buy the album.

• 43:11Ben Gilbert?

  Especially in 2006, where I was frequently buying CDs.

• 43:15David Rosenthal?

  It cracks the top 200 in November 2006. And then slow build over this, you know, social media empire. I don't even know what you call it that Taylor is building.

• 43:25Ben Gilbert?

  And to contextualize this, this is before Instagram has launched.

• 43:30David Rosenthal?

  Yes.

• 43:31Ben Gilbert?

  And I think maybe even still before Tumblr or right around the time Tumblr's starting.

• 43:36David Rosenthal?

  So well over a year later, in January 2008, after 60, 63 straight weeks in the top 200, it becomes the number one album in the world.

• 43:51Ben Gilbert?

  Wow.

• 43:51David Rosenthal?

  It ends up in total on the Billboard Top 200. It spends 275 weeks on the charts. Like what other artist and album could do that?

• 44:04Ben Gilbert?

  Especially from a 16 year old?

• 44:07David Rosenthal?

  She was 15 when it came out.

• 44:09Ben Gilbert?

  Yeah, wild.

• 44:11David Rosenthal?

  Totally wild. So Taylor, she's so smart. She's building this whole direct relationship with her fans, social media, innovating, pioneering in so many ways. She also is a master of the traditional way of doing things too. So what is the traditional thing that an artist would do after they drop their first album?

• 44:29Ben Gilbert?

  Tour, you do press.

• 44:31David Rosenthal?

  You're probably not on your first album gonna go do a headline. Tour yourself, you're going to go be the opening act for other tours. So first she starts opening for Hootie and the Blowfish is the first big act that she opens for, which is awesome. Then Rascal Flatts, Rascal Flatts is going to come back into Big Machine later.

• 44:52Ben Gilbert?

  Perfect.

• 44:53David Rosenthal?

  Then George Strait, Brad Paisley, and then finally Tim McGraw and Faith Hill. So literally the first single, Tim McGraw, she ends the opening act phase of her career, opening for Tim McGraw and Faith Hill. There is this unbelievable quote from Brad Paisley at the time about why he wanted Taylor to come open for her. He says, "I called my manager when I heard her album and said, 'We have to get her out on tour. For her to have written that record at 16, it's crazy how good it is. I figured I'd hear it and think, well, it's good for 16, but it's just flat out good for any age. She is operating at a level I will never reach already in the

• 45:36David Rosenthal?

  groundbreaking way that she has taken a new audience and said, 'I'm a country singer, and they love it.'"

• 45:41Ben Gilbert?

  Wow.

• 45:42David Rosenthal?

  That's amazing.

• 45:43Ben Gilbert?

  Strong words.

• 45:45David Rosenthal?

  So, fast forward to November 2008, the country is in the financial crisis, Lehman Brothers has gone under, it's doom and gloom, you know, Great Recession, blah, blah, blah, all that stuff.

• 45:59Ben Gilbert?

  Airbnb and Uber are starting.

• 46:01David Rosenthal?

  Taylor drops the second album, my favorite album, Fearless. Oh my gosh, there are so many bangers on this album. Fearless, 15, Love Story, Hey Steven, White Horse, and You Belong With Me. Those are just the first six tracks in order on this album.

• 46:20Ben Gilbert?

  Whoa, I thought you were naming all the hits.

• 46:23David Rosenthal?

  No, those are just the first six tracks. Now, they are probably the best six tracks on the album, but yeah, this is a hell of an album. So unlike the debut self-titled album, which takes a year of like this slow burn social media campaign to hit number one, it debuts at number one on the Billboard Hot 200 chart, where it stays for 11 weeks, the longest since Santana's Supernatural in 1999.

• 46:53David Rosenthal?

  The longest in the top 10 by a country artist ever. And she becomes the youngest artist to have what would go on to become the bestselling album of the year and the only female country artist ever to have the bestselling album of the year.

• 47:13Ben Gilbert?

  There's another couple of things about this album that I think are worth pointing out because she's more of an adult now and having real world experiences. She is starting to shift her songwriting from being like love songs and breakup songs about things that she may or may not have experienced that are sort of theoretical into I'm now doing autobiographical music. And this is about me as a, you know, mid teenager and the things that I'm experiencing. And that would go on basically until

• 47:49David Rosenthal?

  Folklore.

• 47:50Ben Gilbert?

  Folklore and Evermore, when she starts to shift and start writing songs about fictional characters and historical characters and other people again.

• 47:59Ben Gilbert?

  She had this sort of like autobiographical thing of here's what I've been going through the last couple of years of my life for the next decade of her career. And this is really where that kind of starts.

• 48:09David Rosenthal?

  That's such a good point because the origin, the first album and, you know, all those quotes about how amazing she was as a songwriter.

• 48:16Ben Gilbert?

  Yeah.

• 48:17David Rosenthal?

  Were about her powers of observation and imagination and being able to write other people's stories from her perspective. But you're right. Yeah. Then there's this like a long, or long from our perspective here in January 2022, middle period of writing about her own experiences. And then she comes back to storytelling.

• 48:38Ben Gilbert?

  Yeah. And she's also starting to take a little bit of heat here for becoming less country and becoming a little bit more pop, which is like a funny foreshadow because what does she do with that? Like she does 1989 later and it's like, you know what? Screw it. Full on pop.

• 48:53David Rosenthal?

  So back to Fearless, she wins the album of the year, the Grammy for album of the year, making her the youngest artist ever to win album of the year. So then she goes back out on tour, not as the opening act this time, of course, but as the headliner, her first real tour, that's her own, the Fearless tour, playing big arenas like Staples Center, Madison Square Garden. Most of these places, like, of course, through her online direct connection with fans, they know when tickets are available, they sell out in like a minute. The tour grosses over $63 million. She plays in front of over a million fans. And then, right in the middle of all of this,

• 49:37David Rosenthal?

  on September 13th, 2009, in New York City, Radio City Music Hall.

• 49:45Ben Gilbert?

  Yes. I didn't realize this happened on a 13th, too.

• 49:49David Rosenthal?

  Of course it did. Of course it happened on a 13th. It's Taylor Swift. Taylor wins best female video for You Belong With Me.

• 49:59Ben Gilbert?

  Which, to be clear, is not the biggest video award of the night.

• 50:03David Rosenthal?

  Nope, nope, nope, nope. There is best overall video still to come in the night. But somebody either is unaware about that or doesn't care.

• 50:14Ben Gilbert?

  Some drunk rapper thought this was the big prize.

• 50:18David Rosenthal?

  Uh, I think we all know what happens next. It's kind of funny to like, talk about the Kanye-Taylor moment on Acquired. But this actually becomes like such a huge part of the business story of Taylor's career.

• 50:35Ben Gilbert?

  It's funny, it inspires so much of her next decade plus. It's a seminal point in everything that she does from there. And everything that she does from there inspires a lot of change in the music business. And so this point, I mean, it's almost like that meme where like you tip over a small little thing and then a huge impact happens years later, like a little domino thing.

• 50:57David Rosenthal?

  Totally.

• 50:58Ben Gilbert?

  But, you know, drunk Kanye getting up and I'mma let you finish, blah, blah, blah. Like, that was a catalyst moment that would change the economics of the music industry.

• 51:09David Rosenthal?

  It would change so much.

• 51:10Ben Gilbert?

  Well, and not to credit Kanye with that. That would piss Taylor off enough to eventually change the economics of the music industry.

• 51:16David Rosenthal?

  Well, Kanye would credit Kanye with that. This was such a butterfly flapping its wings moment in so many ways. There's the specific to, there's the Taylor's music and Kanye's music, which forever changed probably for the better creatively.

• 51:34Ben Gilbert?

  Yeah.

• 51:34David Rosenthal?

  I mean, Kanye's my dark, twisted fantasy.

• 51:36Ben Gilbert?

  Beautiful dark, twisted fantasy. Phenomenal tortured album. I mean, like one of the all time, there's an amazing podcast.

• 51:45David Rosenthal?

  Yes, dissect, season two.

• 51:47Ben Gilbert?

  Yes, the dissect season on that album. It's like one of the best 20 hours you can spend going and listening. If you like music to how that album came to be. And I almost feel sacrilegious speaking so fondly of Kanye on the Taylor Swift episode, but the torture that he put himself through after being an idiot. Or what did Obama call him?

• 52:08David Rosenthal?

  Well, a jackass.

• 52:09Ben Gilbert?

  A jackass. Yeah. Like the president of the United States calls you a jackass for that. And like, he goes into hiding and emerges, you know, creatively from that wounded state with that amazing album.

• 52:22David Rosenthal?

  So I think there's three levels of butterfly wing flapping here.

• 52:27Ben Gilbert?

  Yes.

• 52:27David Rosenthal?

  One is musically creatively for Taylor and Kanye. Two is the business of the industry, which we're going to get into in the rest of the episode here. I think you could maybe argue there is also an element of like even bigger than that. The Obama thing, I didn't put two and two together until just this morning.

• 52:47Ben Gilbert?

  Is this the Kanye Trump relationship?

• 52:50David Rosenthal?

  Yeah, dude.

• 52:52Ben Gilbert?

  No way. Okay. Well, how's this go?

• 52:55David Rosenthal?

  Obama in, I think it was like either CNN or CNBC or something like he's setting up for an interview. And in the pre-show setup with the cameras rolling, somebody's talking about the, you know, the incident at the VMAs. And of course Obama has two teenage daughters who love Taylor Swift. And he says something like, you know, she seems like a perfectly nice young lady. And, you know, Kanye, he's a, he's a jackass and everybody laughs, right? Well, Kanye is like a dude from Chicago. And there's like a real connection there in the past. And he feels so betrayed by Obama. 2020 rolls around and. There's a lot, a lot happening in that moment.

• 53:36Ben Gilbert?

  There's some fascinating things to watch, too. If you go watch the videos surrounding that moment, because of course, you know, Kanye runs up on stage, says that Taylor hears booing from everyone booing Kanye, kind of thinks they're booing her. So she's kind of standing there half smiling, frozen, like, what do I do? She's, of course, performing in the, like, right after this. So she ends up going offstage, collecting herself and successfully performing. And she's asked on the red carpet, she responds with such poise. They're like, what do you think of Kanye West? And she's like, I mean, I don't, I don't really know the guy.

• 54:14David Rosenthal?

  Yeah.

• 54:15Ben Gilbert?

  And they're like, were you a fan? And she goes, I mean, yeah, he's Kanye. And you can just see the disappointment draining from her face of like Kanye West, for as big as Taylor Swift is now, she wasn't Taylor Swift yet, but Kanye West was already Kanye West. And so to be a person, to have Kanye say that about you onstage, it's obvious how that is so debilitating.

• 54:40David Rosenthal?

  And then the deepest irony of all is that what Kanye was upset about is that he felt that Beyonce had one of the greatest videos of all time for single ladies, which she did, which everybody agreed on because she won video of the year later in the night.

• 54:55Ben Gilbert?

  Also, that video is like, that's so simple and pure and genius. That is no doubt one of the greatest videos of all time.

• 55:03David Rosenthal?

  Totally. Was it all done in one take?

• 55:06Ben Gilbert?

  It sure looks like it. It's really impressive.

• 55:09David Rosenthal?

  It's super impressive. The things we never thought we'd be talking about on Acquired. But like, I, this is like the financial crisis. You can't understate the impact of this moment.

• 55:19Ben Gilbert?

  No. And basically, all future Taylor Swift conflicts stem from this, too. Like, we'll get into the Scooter stuff, and that, of course, comes from the fact that Scooter Braun was Kanye's manager. There's Kanye deciding to drudge up history again, which, again, we'll get to. But it's like, all of the future conflicts really do stem from this.

• 55:40David Rosenthal?

  Yeah.

• 55:40Ben Gilbert?

  And here's kind of the sick thing about it all. There was a tremendous amount of emotional turmoil. And there was a lot of negatives, especially immediately afterwards. Both of them. Are way better off today than if this never happened.

• 55:57David Rosenthal?

  Absolutely. I think that's the other dynamic here of like, what, what was better for both of their follower accounts on, you know, Twitter's just starting to come up at this point in time. This is probably right around the same time as the famous race to a million followers, right? On Twitter?

• 56:13Ben Gilbert?

  Yep. Yep.

• 56:15David Rosenthal?

  So after this, the following year, Speak Now comes out, Taylor's third album. And once again, something I didn't really realize until the research. Why is it called Speak Now? What is, what is it about? Taylor wrote all of the songs on Speak Now. She wanted to prove, you can't say anything about me that I like, oh, I get the songwriting credits, but really Liz is writing everything or somebody else is writing everything like, no.

• 56:43Ben Gilbert?

  Right. It's to basically strip herself down and show and say like, this is all 100% me. So if you like this, you like me.

• 56:51David Rosenthal?

  Yep.

• 56:51Ben Gilbert?

  There is no caveating. There's no possible way to say, uh, but she blah, blah, blah.

• 56:56David Rosenthal?

  And, uh, I think people liked it because all 17 of the tracks, 14 on the main album and three bonus tracks, all chart on the Billboard Hot 100, all of them on the album, with at 1.11 of the tracks concurrently on the top 100.

• 57:19Ben Gilbert?

  Wow.

• 57:20David Rosenthal?

  So it becomes the only album in history to have 17 Hot 100 hits, four of which were in the top 10.

• 57:29Ben Gilbert?

  Isn't that crazy? 17% of the most popular songs in America are from your new album and represent 100% of your new album.

• 57:36David Rosenthal?

  Now, speaking of songwriting, right after Speak Now comes out, Taylor starts a new relationship.

• 57:46Ben Gilbert?

  My hope was to have no Taylor relationship conversation on this episode, but I think it's kind of impossible.

• 57:52David Rosenthal?

  I know. I know. I didn't want to, but we gotta do this one. Well covered by the media. Unfortunately, doesn't last very long. There's a big blow up at the end of it. She turns 21 during this and the other party in the relationship famously does not come to her 21st birthday. Yeah, it's bad. So she starts writing a song about it. And this song she would write for over a year. And this is the one that she brings back Liz Rose for even after having just done Speak Now about proving to the world, I do everything myself. This one was so, there was so much in this song that she wanted to say that she felt like she needed some help from her old collaborator. Of course, we're talking about

• 58:35Ben Gilbert?

  All Too Well, Jake Gyllenhaal.

• 58:37David Rosenthal?

  This song, it's a freaking masterpiece. Like, it's a masterpiece.

• 58:41Ben Gilbert?

  A lot of this stuff in this story is like win, win, win for everyone, especially Taylor. I think that kind of keeps being the punchline. The addendum is, except for Jake Gyllenhaal. It's like they had a pretty short relationship that ended up bringing him into the conversation around her life in a way that is just like, he's kind of a punching bag. And like, the fact that she's re-releasing albums from this point in time now, it's like, why are we dredging this up again? Like, it's just very unfortunate timing for him.

• 59:10David Rosenthal?

  Well, but this song is incredible.

• 59:13Ben Gilbert?

  I will say, I also did the Peloton Taylor Swift, Taylor's version ride. And on the 30 minute ride, 10 minutes of it is the 10 minute version of All Too Well. It was a bold Peloton choice.

• 59:25David Rosenthal?

  No, no, no, no. It's not 10 minutes. It's 10 minutes and 13 seconds.

• 59:30Ben Gilbert?

  Of course it is. Of course it is.

• 59:32David Rosenthal?

  So this is the first very, very extended songwriting session for material for the new album, which would come out in 2012. Of course, we're talking about Red.

• 59:45Ben Gilbert?

  Yeah.

• 59:46David Rosenthal?

  So they make the album, Taylor and Big Machine, the usual. She uses Nathan Chapman again as her producer. You know, it's all, it's straight, over-tackle, down the middle, Taylor stuff, exactly what, you know, a label and the music industry would say to do. You've just had this like, great moment, like, give the fans more of what they want. They make the whole album. And Taylor's like, no, this is too similar to the old stuff. If I'm not learning and growing and doing new stuff, I'm not going to do it. So Big Machine wants to release the album and she's like, nope, I'm going to redo it.

• 1:00:26Ben Gilbert?

  Is that how it ended up with a 22 track album?

• 1:00:29David Rosenthal?

  That could be, maybe that's why there's so many tracks. So this is when she brings in Max Martin and Shellback, the famous Swedish producers who had worked with Britney Spears and Backstreet Boys, and they'd just done Maroon 5's Moves Like Jagger. And she's like, we're, we're going full pop with a lot of this and we're going to have a whole new, a whole new sound.

• 1:00:52Ben Gilbert?

  Oh, that's right. Red was super poppy even before we hit 1989.

• 1:00:55David Rosenthal?

  Right, but it's got this schizophrenic vibe, right? Like there's some country on it still, but then there's Max Martin and Shellback on it too. So I think it's great. The other thing I didn't realize about Red until now, album title is Red. And if you look at the cover, you know, it's Taylor sort of looking down, you know, photo of her face.

• 1:01:15Ben Gilbert?

  Yep.

• 1:01:15David Rosenthal?

  Is a reference, I think there's like a double Easter egg in this.

• 1:01:18Ben Gilbert?

  Oh, Taylor's, the whole shtick is double, triple, quadruple Easter eggs nested in the album art and the inside booklet of the album and all the other crazy stuff you can research.

• 1:01:29David Rosenthal?

  So I can think of two Easter eggs. One is the obvious one is it's referencing Joni Mitchell's Blue album.

• 1:01:37Ben Gilbert?

  We got a link to that from the show notes because the thing that you sent me, like the album cover is clearly modeled off of Blue.

• 1:01:43David Rosenthal?

  Clearly, it's like both shots of their face looking down and, uh, you know, Blue versus Red. I think the other one it's probably referencing is the LeAnn Rimes album.

• 1:01:52Ben Gilbert?

  Interesting. A thing I want to point out here is we've been on a pretty steady track to date where she releases a 15 to 20 song album every other year. So you got 06, 08, 2010, 2012, 2014. So she's averaging writing and releasing or writing and recording 10 songs a year. So we'll just seed plant that for now. That was the first decade of her career and we'll come back to it.

• 1:02:18David Rosenthal?

  Yep. And it would be again, another two year break before the next album, which is of course 1989.

• 1:02:26Ben Gilbert?

  So many bops, so many earworms.

• 1:02:29David Rosenthal?

  Oh my god.

• 1:02:29Ben Gilbert?

  So many like popular videos that come along with it all. This one to me was Taylor Swift hitting the mainstream and saying, I am for everyone. And if you look at her Instagram follower count today of just about to hit 200 million, she is indeed for everyone. She's like totally transformed herself to, you know, the, she's always tried to have a little bit this like girl next door, you know, everyone's friend, trying to do the right thing vibe. And here she's just like blowing the doors off that and being like, you like apple pie in America? I have Taylor Swift for you.

• 1:03:05David Rosenthal?

  Yep. And I think everybody in the orbit on Team Taylor knew that like, this was gonna be really big. Cause you know, Red was, it was half pop, but like, it was really successful. Red did not win the Grammy for album of the year, which I think Taylor still kind of resents.

• 1:03:21Ben Gilbert?

  And she hadn't won one since Fearless, right?

• 1:03:25David Rosenthal?

  Yeah, I don't think so. I don't think Speak Now won.

• 1:03:27Ben Gilbert?

  Red didn't win, Speak Now didn't win. And it's funny, we're saying didn't win.

• 1:03:31David Rosenthal?

  Yep.

• 1:03:31Ben Gilbert?

  It's as if it's some kind of loss if the album that you released that year didn't become the, the album of the year.

• 1:03:37David Rosenthal?

  Which I think is how Taylor views it.

• 1:03:39Ben Gilbert?

  That is totally how Taylor views it. In fact, that's the opening scene of Miss Americana is when she gets the call that Reputation wasn't nominated and she immediately switches into this mode of saying, oh, okay. Well, I will write a better album. I, that's okay. I'll make a better record.

• 1:03:53David Rosenthal?

  Not only didn't win, but wasn't even nominated. Like, that's like, oof.

• 1:03:56Ben Gilbert?

  Which in retrospect, that was a mistake.

• 1:04:00David Rosenthal?

  Yes.

• 1:04:00Ben Gilbert?

  But okay, let's go to 1989. Welcome to New York. Blank space. Style. Shake it off. Bad blood. Wildest dreams. I mean, it's unbelievable.

• 1:04:11David Rosenthal?

  She's always pushing the batteries. Like she does two things. One, which is just so fun and totally in the Taylor cultivating the direct relationship with fans. She picks a small number of fans based on their like engagement on social media, how engaged they are in social media. And she does this at her various houses and properties around the country. She invites them over for secret listening sessions of the album before it comes out. Under NDA, they can't talk about what's on the album and she bakes them cookies.

• 1:04:41Ben Gilbert?

  Incredible.

• 1:04:42David Rosenthal?

  And of course, like photographs and videos, the whole thing and posted on social media, like just freaking brilliant.

• 1:04:47Ben Gilbert?

  Right. And the lore that comes from those 10 people getting to say, I was there and eventually post pictures or anything like that. She just gets tremendous amplification of anybody feeling like that could happen to them.

• 1:04:59David Rosenthal?

  Totally. So in July.

• 1:05:03Ben Gilbert?

  What year are we in?

• 1:05:05David Rosenthal?

  2014, right before the album comes out in October. She writes an op ed in the Wall Street Journal saying that she completely disagreed with Spotify and the music streaming industry and that she believes that everything about the way streaming is happening is hurting artists. She says, quote, "In recent years, you've probably read articles about major recording artists who have decided to practically give their music away for this promotion or that exclusive deal. My hope for the future, not just in the music industry, but in every young girl I meet, is that they realize all they're worth and ask for it. Music is art and art is important and rare. Important, rare things are valuable. Valuable

• 1:05:51David Rosenthal?

  things should be paid for. 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." Now, what's she saying here? Like, her specific beef is with Spotify's free tier.

• 1:06:13Ben Gilbert?

  The ad-supported tier just doesn't generate the royalties for people who listen to a stream that you would if you were a paying member.

• 1:06:23David Rosenthal?

  And I think there's kind of two levels to Taylor's objection here. One is, yeah, about the money. Like, lots of people are streaming my music for free and I'm not getting paid or I'm getting paid a very, very tiny amount for it.

• 1:06:35Ben Gilbert?

  Very, very little.

• 1:06:36David Rosenthal?

  I think the other is she genuinely, as she says in this piece, has an issue with people thinking that music should be free. She's like, no, like, I made this. This is art and it's valuable and nobody should get to consume it without paying for it.

• 1:06:51Ben Gilbert?

  Yes, this is where we're really starting to see Taylor viewing herself as the poster child for the music industry. And when I say music industry, I mean the artists. And she views herself, she's even referred to herself on camera, which is great, as the resident loud person of the music industry, which I think is such a great and a little bit self-effacing way to put it, where she's looking around, she says, I believe this, we're going to hell in a handbasket here, and like, someone's got to do something, it's gonna be me again. This is the first time that she's really embracing that role.

• 1:07:23David Rosenthal?

  Yep.

• 1:07:24Ben Gilbert?

  Let's take a moment to talk about the decline of the music industry, and then I want to talk a little bit about how the royalties actually work in streaming. So, first of all, the music industry peaked in 1999 with about $14, $15 billion in recorded music revenues. So this is shipping CDs, basically. I mean, when you look at this line, and we'll link to the RIAA's wonderful tableau diagram of this, it is like 90-plus percent shipping CDs. That was a goldmine for the music industry. And then it starts declining. And like, very clearly, Napster happened, and then it fell like crazy. I'm

• 1:08:05Ben Gilbert?

  looking at 2005, it was at $12 billion. And then just five years later, it's at $7 billion in 2009. CD sales fall like crazy. Music streaming hasn't really kicked in yet. And so there's just no money being made. And the all-time low for the entire music industry for recorded revenues was like $7 billion in 2014 and 15. So it's like, right around this time, where streaming hasn't started generating real revenues yet. The industry's basically been like, flat to declining for the last six, seven years. It's brutal out there. And so what Taylor's sort of looking at is like, if we continue to put all our eggs in this streaming basket, I don't know. So why is she saying, I don't know?

• 1:08:51Ben Gilbert?

  Well, let's resume our previous conversation from when we were talking about the different types of licenses and the different types of copyrights.

• 1:09:00David Rosenthal?

  Oh, I can't wait. Let's do it.

• 1:09:03Ben Gilbert?

  All right. So talked earlier about the publishing right and the master right, which you can think of as the publishing is kind of like the songwriting, the master is kind of like the recording. So now let's talk about the different ways each song could be played and which licenses are actually required for each and what the typical economic breakdown is for each one. So while we're on the topic of streaming, let's start with that. Well, when you stream a song on Spotify, the vast majority of the payout goes to the master recording. So think the label. And when I say vast majority, let's call it 80%. A much smaller portion, 12% on average, goes to the owner of the publishing right, typically the songwriter.

• 1:09:44Ben Gilbert?

  So that 80% goes to the label, which then gets distributed to the artist, the singer or the band, depending on the royalty rate that they negotiated, which, as I mentioned, tends to be 10 to 20% going to the artist.

• 1:09:56David Rosenthal?

  So you're thinking like 8% now, 8 to 10%.

• 1:10:00Ben Gilbert?

  Right, exactly. You get 10% of the 80%. So then if they're also the songwriter, which Taylor frequently is, let's say that they take home the vast majority of the 12%. So let's call it 10%. So from a Spotify play, it's reasonable to assume that a singer songwriter would receive about 18% for both of those credits. It's sort of useful to know that figure and what licenses get used in streaming.

• 1:10:25David Rosenthal?

  And is the balance of the, so say like 80% to the master license holder and then 12-ish percent to the?

• 1:10:32Ben Gilbert?

  Yeah, I don't totally know where the balance goes. It might be like BMI and ASCAP or something.

• 1:10:37David Rosenthal?

  I'm wondering, is the balance to Spotify or?

• 1:10:40Ben Gilbert?

  No, this is the balance of what ends up getting paid out on a play. So it's, it's like 92% to license holders and 8% to I don't know who.

• 1:10:49David Rosenthal?

  Got it.

• 1:10:51Ben Gilbert?

  So radio, even though you kind of feel like you're doing the same thing when you're listening to a song on the radio versus listening to it on Spotify, it's actually totally different, which is really stupid, but the way it is. A song played on the radio is technically a performance. So the rights associated with that are similar to if you decided to go on tour and play your song. So in traditional radio, the split is totally flipped from what we just talked about in streaming rights.

• 1:11:16David Rosenthal?

  Oh, no way.

• 1:11:17Ben Gilbert?

  So the majority of the revenue actually goes to the songwriter, believe it or not.

• 1:11:22David Rosenthal?

  Interesting.

• 1:11:23Ben Gilbert?

  But the recording artists actually don't make that much. So in the old world, if you were a songwriter, you wanted a chart topper because that's how you would make your money. And if you were the singer or the artist, you wanted it too, but you wanted it for marketing purposes because then people would go buy your CDs, which is where the artists would and the record labels would actually make their real money.

• 1:11:43David Rosenthal?

  Interesting. And of course, Taylor's getting, you know, both of these, but feels rightly so, like she should be getting more of each.

• 1:11:51Ben Gilbert?

  Right. And in any songwriter economics, she gets way more of the split than in any masters related economics. Another example is songs that are played as a part of like movies or commercials. These are granted via something called a synchronization license or sync rights. There's a split between both the publishing and the master right for this one. I think they're about even or they're closer together. Importantly, both copyright owners need to agree to grant this license. So this is why even if an artist doesn't own their masters, but they did write the song, they can still decide if it gets used in a commercial. It's like a veto right. And so this is a smaller overall revenue stream for the industry, but there's sort of a fascinating element to it there where even if you don't

• 1:12:34Ben Gilbert?

  participate meaningfully in the economics of something, you still have a veto right over it.

• 1:12:38David Rosenthal?

  Interesting.

• 1:12:39Ben Gilbert?

  So we have all heard this notion, streaming doesn't pay. Taylor's loud about it here. I think a lot of people know, like, well, in the music industry, you know, streaming doesn't make the money, but things like touring do. So let's put some numbers around that. At least on Spotify and Spotify like services, it's about 0.4 cents per stream. And then that cent, that 0.4 cents gets cut up between the label, rights organization, et cetera, before the artist. And so it's reasonable, this is a crazy thing, but it's a reasonable ballpark to say that a million streams can net about $4,000 for the artist and their label in revenue.

• 1:13:20David Rosenthal?

  Ooh.

• 1:13:22Ben Gilbert?

  And if you have a 10% royalty, that means as an artist, you make $400 for a million streams.

• 1:13:29David Rosenthal?

  Oh, that's so brutal.

• 1:13:33Ben Gilbert?

  And that is if you are recouped against your advance.

• 1:13:36David Rosenthal?

  Wow.

• 1:13:37Ben Gilbert?

  Otherwise, it's zero.

• 1:13:38David Rosenthal?

  Wow.

• 1:13:39Ben Gilbert?

  So for a very popular artist, you know, you could 2X this by having a 20% royalty, or if these streams were on Apple Music where it's subscription only and therefore a higher payout per song, that could further double it. But even if you have a 20% royalty on Apple Music streams, that's still, you make 1,600 bucks for a million streams as the artist.

• 1:13:58David Rosenthal?

  So Taylor's not wrong here. Like, this is

• 1:14:00Ben Gilbert?

  No.

• 1:14:01David Rosenthal?

  Bad.

• 1:14:02Ben Gilbert?

  Yeah. And if you compare this to the old world, artists used to make like a dollar per CD sold. Like, if you had a 10% royalty on a $10 CD, there's some retail stuff you pay, but like, you make around a dollar. And so, you know, a million people listening to one song in the old world, or more accurately, because you were buying CDs, 100,000 people buying your album, would be like $100,000 for the artist. So you're used to people listening to your recorded music netting you real dollars if you're coming from the old music industry.

• 1:14:35David Rosenthal?

  Right.

• 1:14:36Ben Gilbert?

  And the line I wrote in my notes, David, you can kill me later, is, "An artist is never, ever, ever going to make a lot of money from streaming like ever."

• 1:14:45David Rosenthal?

  Groan. I love it. I love it. I love it. Oh, man.

• 1:14:52Ben Gilbert?

  All right. So Taylor Swift 2017, right before their Reputation Tour, we're flashing forward a little bit. So like, she's Taylor freaking Swift at this point. Only $2.4 million of her total income from everything she does comes from streaming, which might sound like a lot, but she's like, a number one artist at this point.

• 1:15:12David Rosenthal?

  Yeah, she's making between 50 to 150 million a year, depending on whether she's touring or not.

• 1:15:18Ben Gilbert?

  Yeah. And for even a better illustration, U2, that same year, made $54 million total, and only 600,000 of it came from streaming.

• 1:15:26David Rosenthal?

  Wow.

• 1:15:28David Rosenthal?

  Oh.

• 1:15:29Ben Gilbert?

  Like ever.

• 1:15:31David Rosenthal?

  Ever.

• 1:15:33David Rosenthal?

  Okay, so we were talking about 1989. Taylor drops the album on October 27th, 2014. It sells 1.3 million copies of physical and digital in the first week. It's huge on streaming.

• 1:15:50David Rosenthal?

  Taylor had written that op ed in the Wall Street Journal back in July. So before this, everybody's kind of on edge like, what's going to happen here? She drops the album. A week later, on November 3rd, after having been out for a week.

• 1:16:02Ben Gilbert?

  Oh.

• 1:16:04David Rosenthal?

  Taylor pulls her entire catalog off of Spotify, not just 1989, but all of her albums, gone off of Spotify.

• 1:16:14Ben Gilbert?

  Power move.

• 1:16:15David Rosenthal?

  Totally power move. It would take until over two years later in late 2017, when T. Swift would come back to Spotify before the Reputation release. Actually, I think it was just about two years.

• 1:16:27Ben Gilbert?

  I think it was three.

• 1:16:28David Rosenthal?

  Oh, you're right. It was three. It was three years.

• 1:16:31Ben Gilbert?

  Yeah.

• 1:16:32David Rosenthal?

  Quote from Daniel Ek when T. Swift finally comes back. "I should have done a much better job communicating this, so I take full ownership of that. I went to Nashville many, many times to talk to Taylor's team, spent more time explaining the model, why streaming mattered. And the great news is, I think she saw how streaming was growing. I think she saw the fans were asking for it. So eventually, when the new album, being Reputation, came out, she came to Stockholm and spent some time here figuring out a way that made sense to her."

• 1:16:59Ben Gilbert?

  Wow.

• 1:17:00David Rosenthal?

  This is the CEO of Spotify. Like, I mean, obviously he gets involved here.

• 1:17:04Ben Gilbert?

  And by the way, when he says her team, there's an organization that's pretty big. I don't know if it's 20 employees, 15 employees, something like that, but it's called 13 Management. And it is, it's her whole team. There are other entities associated with it, one for merchandise, one for the fan club. Like, there's all these like, real businesses that are sort of surrounding Taylor Swift, the artist. And there's a lot of people that work on those.

• 1:17:29David Rosenthal?

  So we're going to come back a little later to talking about why she changed her mind on streaming and what streaming can do for her now. But there's one more thing in this chapter.

• 1:17:39Ben Gilbert?

  Apple Music?

• 1:17:40David Rosenthal?

  Yeah, Apple Music didn't exist back then. It was Beats and she was cool with Beats because Beats was paid. There was no free tier in Beats.

• 1:17:49Ben Gilbert?

  Yep.

• 1:17:49David Rosenthal?

  After Apple bought Beats, and we covered this back on our Beats episode way back in the day. This is so fun. When they were gonna launch, relaunch it as Apple Music in, this is June 2015, they announced that everybody's gonna get a three-month free trial of Apple Music before you have to pay. Well, what they didn't announce to the world was that the backend of that for artists was gonna look just like Spotify's ad to artists weren't gonna get paid during that three months. So Taylor, Taylor's like, oh, no, no, no, no, no, no.

• 1:18:29Ben Gilbert?

  Taylor's comment on this, which is unfreaking believable, is, and quote, "We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation."

• 1:18:39David Rosenthal?

  The two sentences before that in the quote, which of course she posts to Twitter and Tumblr on her own social media to her own, you know, audience. "I find it to be shocking, disappointing, and completely unlike this historically progressive and generous company. Three months is a long time to go unpaid, and it is unfair to ask anyone to work for nothing." And then Ben, as you said, "We don't ask you for free iPhones. Please don't ask us to provide you with our music for no compensation."

• 1:19:05Ben Gilbert?

  Here she is taking on her role of industry loud person again. And the best part is that Eddie Q tweets back at her.

• 1:19:14David Rosenthal?

  Oh, my God. So this is so great. Literally within 24 hours, Apple changes its stance because of Taylor. Apple doesn't change its stance for freaking anybody. It's Apple. It's the biggest company in the world. Tim Sweeney can't get them to change their developer, like. This is unbelievable. Less than 24 hours. Eddie Q tweets, "We hear you @taylorswift13", because of course her Twitter handle is @taylorswift13, "and indie artist", I don't know where that "and indie artist" comes from. Like, no, this is about Taylor.

• 1:19:43Ben Gilbert?

  Yeah.

• 1:19:43David Rosenthal?

  So then later that day in an interview, he says, "When I woke up this morning and I saw Taylor's note that she had written, it really solidified that we needed to make a change. Overnight, they change it and they say, 'We're gonna eat the cost during the three-month free trial for customers and pay artists.'"

• 1:19:58Ben Gilbert?

  Taylor Swift versus Apple, Taylor Swift wins. That is a rare, rare, rare thing.

• 1:20:04David Rosenthal?

  Yeah, you might be wondering, "Well, how does Taylor make all this money if it's not from streaming? And obviously, digital album sales, she makes a good amount of money from that. She makes money from endorsements, various merch, other stuff." The 1989 tour grosses $250 million. So that's a quarter billion dollars from the tour. Now, that's gross. And it is quite expensive to put a tour on. Like, you gotta pay for the arena, you got, you know, fireworks, crew, other musicians. Like, it's, this is not high-margin revenue, but-

• 1:20:37Ben Gilbert?

  This ain't software.

• 1:20:38David Rosenthal?

  Not software, but still $250 million is a lot for one tour, for one album. It becomes the highest grossing US tour of all time, beating The Rolling Stones.

• 1:20:50Ben Gilbert?

  Whoa.

• 1:20:51David Rosenthal?

  Sadly for the 1989 tour, but not sadly for Taylor, that record would be broken a couple of years later by The Reputation Tour.

• 1:20:59Ben Gilbert?

  Which grossed $266 million.

• 1:21:02David Rosenthal?

  In the US and 345 worldwide.

• 1:21:05Ben Gilbert?

  Whoa.

• 1:21:07David Rosenthal?

  Yeah, that's a lot of money.

• 1:21:10Ben Gilbert?

  And I have to imagine that's still the highest grossing tour today, because who would have performed after that with COVID?

• 1:21:17David Rosenthal?

  No, it is not. So this is where it's interesting. Like, you can't really do apples to apples with different artist tours. Actually, it gets eclipsed by Ed Sheeran, T-Swift bestie, with his, I think, Divide tour.

• 1:21:31Ben Gilbert?

  Oh.

• 1:21:31David Rosenthal?

  But I think The Reputation tour-

• 1:21:35David Rosenthal?

  I'm gonna get this wrong. I want to say it had, call it 50 dates, 40, 50 dates, something like that. The divide tour went on for years and had like, you know, I don't know, 200 dates or something like that.

• 1:21:44Ben Gilbert?

  I think she still holds the record for the highest single year grossing tour.

• 1:21:48David Rosenthal?

  That is also hard because it's, you know, how often do you perform? You could perform 200 times in a year.

• 1:21:53Ben Gilbert?

  Right. Yeah, it's really hard to normalize these. You need to do the same thing that people do in retail where they like do same store sales. So you're like, what's your average price per arena or per show?

• 1:22:04David Rosenthal?

  Yep.

• 1:22:05Ben Gilbert?

  Okay, so interesting on touring. That's the Reputation tour. We did sort of flash forward here and we just started talking about Reputation. Reputation was inspired by a series of events and is a very different album than its predecessor of 1989. It's much darker. It's making a loud statement. In fact, there were two years before it where she didn't release an album versus her typical every other year. So there was a whole sort of year that she did some reflecting, some changing, some grieving, some being angry. What on earth happened that predated Reputation?

• 1:22:44David Rosenthal?

  Well, first I have a confession to make. So until like, I don't know, 24 or 48 hours ago, I was still in the camp that like, I mean, I know all this context and whatnot, but just like me personally enjoying the music, I didn't like Reputation. I thought it was, you know, I was with the majority when it came out that it was a weaker album.

• 1:23:05Ben Gilbert?

  Yeah.

• 1:23:06David Rosenthal?

  And as you brought up, the opening scene of Miss Americana is Reputation not even getting nominated for Grammy, right? Like, everybody agreed. And then recently it has become very cool, much like Kanye's 808s and Heartbreak album, to say, no, actually Reputation was really great. It was just ahead of its time.

• 1:23:25Ben Gilbert?

  How dare you bring Kanye into this? And I will say, like, so Reputation has some just like amazing songs. Ready for it. I did something bad. Look what you made me do.

• 1:23:37David Rosenthal?

  Anyway, I didn't like it. But now doing all the research and re-listening to it, I think it's great. I love it. I'm now in the camp of it's fantastic.

• 1:23:44Ben Gilbert?

  Yeah, it's interesting when some albums are better after years go by.

• 1:23:48David Rosenthal?

  I really like Endgame.

• 1:23:50Ben Gilbert?

  Oh, yeah. Also great.

• 1:23:52David Rosenthal?

  With Ed Sheeran, of course.

• 1:23:54Ben Gilbert?

  By the way, David and I are not music critics. There are like four Rolling Stone podcasts linked in the sources that are like an amazing music columnist discussion of each of these albums. If you want to do some like real musical analysis on it. But anyway, okay, what inspired Reputation?

• 1:24:11David Rosenthal?

  Okay, so yeah, what is it? What inspires it? On Valentine's Day, February 14th, 2016, Kanye West releases The Life of Pablo.

• 1:24:23David Rosenthal?

  I don't know that I've actually ever listened to Life of Pablo all the way through, but I think it's probably a pretty good album. But of course, it has the song.

• 1:24:30Ben Gilbert?

  Famous.

• 1:24:31David Rosenthal?

  Famous, which has the famous line in it. The, I don't think we need to say it here, right? I think people know what it is, right? Yeah.

• 1:24:38Ben Gilbert?

  Absolutely not. It's a pretty offensive line, made more offensive by a music video where Kanye finds a.

• 1:24:47David Rosenthal?

  Doll that.

• 1:24:48Ben Gilbert?

  Is it a doll? Is it a model? But something that looks a lot like Taylor Swift and it's nude in the video. It is just like so much about this is so offensive and cringe worthy to look at. And the album comes out and I don't think we need to go into the whole like Kim Snapchat thing here. But suffice to say Kanye and his team deemed it appropriate to release this album with this song to the world. And you can't ship an album without a lot of people signing off on it, including your manager. And things were signed off on.

• 1:25:22David Rosenthal?

  Well, I mean, literally in the video of the famous phone call, Rick Rubin, the famous producer is in the background in the bit like he produced, I don't know if he produced that song, but the album, like he was there.

• 1:25:33Ben Gilbert?

  Yes.

• 1:25:34David Rosenthal?

  Lots of people were involved.

• 1:25:35Ben Gilbert?

  I guess we should allude to at least like what it is. So there's this like terrible lyric that Kanye, after the album comes out, says, oh, Taylor and I actually talked about this and she approved it. And Taylor's like, no, I didn't. And then later on, Kim Kardashian releases some Snapchats that are like, I secretly taped, or Kanye secretly taped this conversation and here's you saying that it was okay, but she didn't fully say it was okay. She didn't approve the worst part of the line. Anyway.

• 1:26:01David Rosenthal?

  There's controversy.

• 1:26:02Ben Gilbert?

  There's lots of discrepancy over this. Taylor is like, what the hell? I thought this thing was dead and buried five, six years ago, and here we are dredging it up again.

• 1:26:13David Rosenthal?

  Again, yeah.

• 1:26:15Ben Gilbert?

  Again, how could this not send you into some like emotional duress such that you're not releasing your next album when you thought you were, that it changes where you are creatively, that it inspires a whole new look and feel and tone to your music?

• 1:26:27David Rosenthal?

  A lot of popular opinion turned against Taylor and that's gotta be hurtful, too. That's gotta be really hurtful.

• 1:26:33Ben Gilbert?

  Totally. And popular opinion kind of fairly turned against her. Like she was saying, I don't know if she exactly said, we never talked, but she kind of implied like there was no agreement. And what the Snapchat, so is like, you definitely had a conversation. You were very thoughtful about how this is going to come across when this gets released. You may not have heard that one lyric, but like you totally talked. So then Taylor sort of has to change her positioning to the public after she's getting sort of lambasted and people are turning on her and say like, well, I didn't hear that line and that's sort of what I meant. And it's not a great look.

• 1:27:07David Rosenthal?

  No, it's, it's not.

• 1:27:09Ben Gilbert?

  And so for the first big time, a person who derives a lot of her pride and a lot of her sense of self and has always gotten very positive, largely positive feedback from fans is now seeing an immense amount of negative feedback. And it really, she talks about this in Miss Americana, it really requires a psyche reset where. She has to retrain herself on who I am in the world and why I'm a person of value and why I need to value myself and how I should think of myself that is not connected from, did a million people tell me I'm great today?

• 1:27:45David Rosenthal?

  Because a lot more than a million people were telling her she was not great at that point.

• 1:27:49Ben Gilbert?

  Yes.

• 1:27:50David Rosenthal?

  So yeah, that's, that's the background for reputation. And, you know, other than like this being hugely influencing the creative aspect of the work, this comes up in a really big way very soon in the business aspect of Taylor Swift.

• 1:28:05Ben Gilbert?

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• 1:28:19David Rosenthal?

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• 1:28:43David Rosenthal?

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• 1:29:17David Rosenthal?

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• 1:29:33Ben Gilbert?

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• 1:29:54Ben Gilbert?

  All right, David, I think Taylor's six record deal is up.

• 1:29:58David Rosenthal?

  Yeah. So that's the other thing about reputation. Man, reputation was such a landmark.

• 1:30:03Ben Gilbert?

  It's a turning point in the career in a huge way.

• 1:30:05David Rosenthal?

  But I think this is the thing about Taylor that we're going to talk about in much more in playbook. But like every album is a turning point in her career. Like she reinvents herself every single time. And I just have so much respect for that. Like, that is so hard to do.

• 1:30:20Ben Gilbert?

  So we've talked about the rights that you license when you you give your masters away. The way these record deals work is they sign you for a certain number of albums. And they're saying, look, if I'm going to take the risk and front you money for this first album, I'm either committing to or getting the option to your next X albums. Taylor's was six. That's about market from what I could tell.

• 1:30:41David Rosenthal?

  Yeah, I was gonna ask, is that normal?

• 1:30:42Ben Gilbert?

  I think so. It actually used to be more, but it's like eight to 10, but it's come down in recent years.

• 1:30:47David Rosenthal?

  So this was her sixth album and the last one she was under contract with Big Machine for. Taylor does all of Taylor's own stuff, but she doesn't have any issue with Big Machine per se. There's no bad blood there.

• 1:31:00Ben Gilbert?

  Ew.

• 1:31:01David Rosenthal?

  But the industry is like, well, this, this is going to be a big moment. A Variety article from around the time comes out that lays out what they see as Taylor's four options for what to do going forward, uh, now that this deal is expiring. And they note that probably the most important factor in her decision is going to be the master licenses, certainly for future albums that she'll make. She's not going to take a 10 to 15% cut going forward, but they suggest, say, people in the industry are saying that Taylor is such a big star that depending on how things go with Big Machine in this negotiation,

• 1:31:43David Rosenthal?

  she might be able to renegotiate the past split on old albums that she's done if Big Machine is involved going forward. So they say there's probably four options here. One, Taylor actually genuinely could just ditch labels altogether and go run this whole thing herself. I think the bigger reason she and other people don't do this is if you do go this path, you essentially have to build a whole full stack company around yourself. And that takes a lot of time and energy. And if you are an artist and the primary thing you do is create and make music, that's a distraction and time away from that.

• 1:32:19Ben Gilbert?

  There's way more stuff involved in the back office of music than you can fathom. I mean, of course, there's like, we need to make sure it gets on all the streaming services, but you also kind of need to be in retail, even though there's not a lot of CDs sold. If you're Taylor Swift, your CDs are being sold. You need to be able to make CDs. You need to be able to make merch. You need to be able to handle all the inbound requests for people who want to use your music for certain things. You need to work with the rights organizations to go around to events who are illegally using your music and make sure that they're listening for that and making sure there's a matching license. And if not, sending them the invoice for it. And this is an unbelievable amount of things that if you go through the traditional value chain through the record labels, that you kind of get.

• 1:33:04Ben Gilbert?

  The other big component that I sort of failed to realize until reading, again, reading Donald Passman's book is just so enlightening. It's like the venture deals of the music industry is the right, I think, the best way to put it. If you're a retailer or if you're a streaming service, you can't really piss off one of the big three because their clout is to take everything away from you. Or even let's say you're a retailer, and these don't matter as much anymore, but let's say you're selling CDs. Like for the indie artist who dealt with you individually, they can be the last check that you pay, but you better make sure you're writing the checks to everybody who's on the label because they sort of work as a group. And so there's all these ways, you know, you want to make sure that you're getting on the right playlists on Spotify.

• 1:33:46Ben Gilbert?

  There's all these ways where it's really helpful to be a part of something really big for negotiations.

• 1:33:52David Rosenthal?

  Maybe this is part of the unsaid point of in this Variety article is that like, Taylor is really one of the few artists, maybe the only one who could do that.

• 1:34:01Ben Gilbert?

  Right.

• 1:34:01David Rosenthal?

  That second point that you're mentioning, I think, applies to almost every artist, but literally she made Apple change their policies in 24 hours.

• 1:34:10Ben Gilbert?

  Right.

• 1:34:10David Rosenthal?

  So she could, but it's unlikely that she's going to decide to do that just because she's an artist. She wants to be an artist. Option number two that they lay out is she could sign with a different kind of major label ecosystem altogether. So she, remember, Big Machine, her label, is part of the Universal heritage and ecosystem.

• 1:34:30Ben Gilbert?

  Yeah.

• 1:34:31David Rosenthal?

  Taylor could jump to Warner Music Group or Sony or, you know, one of the other big groups. And she already has the Sony relationship for songwriting. That's not unreasonable. Probably going to come down to like just economics and who's willing to pay the most in that arena. Three, she could leave Big Machine, but stay in the Universal ecosystem and sign with, you know, the parent label itself or one of the other sublabels within Universal. And option four is she could stay with Big Machine. Now, ultimately, as we all know, she chooses option three.

• 1:35:07Ben Gilbert?

  She does explore staying with Big Machine.

• 1:35:10David Rosenthal?

  She definitely does.

• 1:35:12Ben Gilbert?

  They even publish what looks like some screenshots of legal document going back and forth and having proposed changes. And it sort of seems like from those, what Big Machine is angling for is if you sign with us for, they want 10 years, Taylor says seven, then by staying with us, you earn back the rights to all your masters. So if you stay with us through this second term, then the masters from your first term become yours. And there's no way to know what the economic splits were or any of the other terms of this agreement. We don't even have it substantiated that that screenshot that Big Machine decided to put out is real. But what we do know is that Big Machine was willing to let her have her masters from the first six albums if she signed with them again. And we don't know what the terms were.

• 1:35:57David Rosenthal?

  So she signs with Republic Records, which is another Universal sublabel, and specifically, it's Universal's pop sublabel. Now, this makes tons of sense. Big Machine is a country label and independently owned, but in the universal ecosystem. Republic is a pop label. Like, this really is what makes sense. And, and not only that, but Taylor and Big Machine had been working super closely with Republic to get all of Taylor's songs that when they wanted pop radio play to get on pop radio stations. Republic was the one handling that because obviously Big Machine didn't have those relationships. So when this is all announced, like, it's very amicable. At least that's what's, this is presented

• 1:36:42David Rosenthal?

  as. Taylor is staying in the Universal family.

• 1:36:46Ben Gilbert?

  She's moving from a country label to a pop. It makes lots of sense.

• 1:36:49David Rosenthal?

  And again, we don't know what the tenor and tone of the negotiations were up to this point. But once this happens, this really, really changes the business dynamic for Big Machine. And again, we don't know how much people knew this was going to happen beforehand, but here's the reality. It's estimated that revenue from Taylor's work was 80% of Big Machine's total revenue. Now, they had other artists. They had Rascal Flatts. They had other folks, both current and past, and that they owned the masters of in the past. But Taylor was so big, it was 80% of the revenue of the company. While Taylor is still signed with them, you know, that's like operating revenue.

• 1:37:33Ben Gilbert?

  And even after Taylor's not signed with them, it's still your operating revenue because...

• 1:37:37David Rosenthal?

  Well, the nature of what this asset is, it really goes from becoming, I think in my view, this is all my interpretation, that 80% of Big Machine's revenue turns from being operating revenue into being like a cash flow streaming asset revenue. Like, the whole nature of the company changes. Like, you were a label who worked with Taylor Swift and you were produce, actively producing music with her and distributing and everything, to now you've got her library. And that's very different.

• 1:38:06Ben Gilbert?

  Right. That's a great point. Yeah, it's now an income producing asset.

• 1:38:10David Rosenthal?

  Yes, for sure. To your point, you need people to, you know, answer the phones when somebody wants to use it in a commercial and have their relationships with the label, but like... Probably, I don't know, 80, 90% of your operating activities around that, you know, the Taylor Swift aspect of your business now just like disappear.

• 1:38:28Ben Gilbert?

  Right.

• 1:38:29David Rosenthal?

  It changes the nature of what Big Machine as a company is, and specifically turns it into this like, at the time, you would think, probably predictable cash flow asset.

• 1:38:41Ben Gilbert?

  By the way, this cash flowing asset that you own is subject to someone else having strong feelings about the cash flow ability of that asset.

• 1:38:50David Rosenthal?

  Exactly.

• 1:38:51Ben Gilbert?

  So what's the first thing that comes out in terms of some scuttlebutt on this deal?

• 1:38:58David Rosenthal?

  Well, it's an extended period of time before all the drama and all the beef and everything comes out around Big Machine and the masters. I suspect what happened is that as soon as this change happened, all the dynamics we were talking about become evident. It now becomes pretty clear that like, Big Machine is now a securitized asset essentially, and probably should be sold. Scott Porchetta could hang on to it and keep the royalties associated from the old T-Swift masters. But like, there's not that much else going on. Big Machine has a label. It's now this cash flow asset. The market is hot for securitized IP licensing deals.

• 1:39:38Ben Gilbert?

  Hotter than ever.

• 1:39:39David Rosenthal?

  Probably he's gonna sell. The reason I think this is now becomes a separate phase in the negotiations is because had Taylor made a different decision and stayed with Big Machine, either fully or in some form, all these dynamics would be different.

• 1:39:52Ben Gilbert?

  Much less likely to sell.

• 1:39:54David Rosenthal?

  Yeah, exactly. But once you made the decision to leave, now it sort of kicks off the sale process. So now, lots of people are interested. They run an auction. Reportedly Evan Spiegel, who I didn't realize dated Taylor Swift briefly, is interested in buying. Lots of PE shops are buying.

• 1:40:13Ben Gilbert?

  I think for Snap, the idea was to like build music into the Discover tab that they owned or something.

• 1:40:19David Rosenthal?

  Interesting. Well, they run a sale process. Now here's the question.

• 1:40:24David Rosenthal?

  Is Taylor part of the sale process? Could Taylor reasonably have just bought either Big Machine itself or the Masters, which were the majority of the value of Big Machine?

• 1:40:37Ben Gilbert?

  I mean, either yes, she could have outright if she was the highest bidder, or she could have lined up financing to become the highest bidder.

• 1:40:44David Rosenthal?

  Taylor's current net worth is $550 million, so just over half a billion. At the time, this is according to Forbes, at the time Forbes thought it was probably around 360 million. The ultimate sale ends up happening for between 300 to 330 million. She for sure could have, you know, it would have been like most of her net worth by an hour, but she would have lined up financing, just like everybody else lined up financing to do this.

• 1:41:07Ben Gilbert?

  Now, did they pick up the phone and call her and say, do you want to make a bid? That we don't know.

• 1:41:12David Rosenthal?

  She claims that she was never offered the chance to outright buy either Big Machine or the Masters themselves.

• 1:41:20Ben Gilbert?

  Which is of course fascinating because the owners, and you can see this on the Secretary of State website for the state of Tennessee, of Big Machine Records LLC, there are only five members in this LLC. One, of course, is the CEO Scott Borchetta. Another, of course, is Toby Keith. There are two that we don't know, at least Dave and I couldn't find in the research. And then, of course, the fifth is Scott Swift. So in order to make a sale,

• 1:41:50Ben Gilbert?

  it's not that you need Scott's vote. And what apparently happened is because there was a non-disclosure agreement involved, that he didn't want to attend because he, of course, would want to call Taylor, but he did not attend the vote to decide to sell this or not. But it is crazy that the Swift family is one of five shareholders of Big Machine. And when the sale inevitably does happen.

• 1:42:16David Rosenthal?

  Everybody knows this is going to happen. Taylor even says that she knew that once she went somewhere else, it was obvious that Big Machine was going to get sold.

• 1:42:23Ben Gilbert?

  Yes. Now, who did it get sold to?

• 1:42:27David Rosenthal?

  As we were saying, there's a lot of private equity interest, and it does get sold to a private equity backed company by the name of Ithaca Holdings. Specifically, it is backed by Carlyle.

• 1:42:38Ben Gilbert?

  David, who's Ithaca Holdings managed by?

• 1:42:41David Rosenthal?

  The CEO of Ithaca Holdings is Scooter Braun. And Scooter himself, very well known, famous talent manager in the industry of artists like Justin Bieber.

• 1:42:53David Rosenthal?

  And for a time Kanye West.

• 1:42:55Ben Gilbert?

  And for a time Kanye West. And for a time, well Kanye West put out Famous Kanye West.

• 1:43:02David Rosenthal?

  Yes, you made the point. Lots of people knew that Famous was being worked on and was coming out and like, there are people in that video that obviously were there. Certainly Scooter probably knew about it. Would any of that changed Kanye doing this? Like, I don't know.

• 1:43:18Ben Gilbert?

  So to cut to the chase, Taylor comes out with a post about this and says, this is my worst nightmare. Not only that I wouldn't be given the opportunity to buy my masters, but also by Scooter Braun. And what's not totally clear, and it doesn't need to be public because people can have private spats, is like, okay, so he bandaged Kanye during that time. There was one thing on Instagram that Justin Bieber posted at one point that had Scooter Braun in it that said like, what's up Taylor? That she screenshotted and used to show that in some way Scooter had been taunting her. What's not totally clear is like, why there's beef and why it's her worst nightmare for it to be Scooter. But

• 1:44:00Ben Gilbert?

  she absolutely, once she decided that that was true, made a gigantic deal about that. And I have no value judgment on that. But this served as an explosive point for her and her fanbase.

• 1:44:14David Rosenthal?

  Then things just get even more interesting from a business standpoint. There's this whole morass of rights issues around what you can and cannot do with music.

• 1:44:22Ben Gilbert?

  Taylor owns the, not the recording copyrights, the masters, but the, the songwriting copyrights. So she's been vetoing all these opportunities to use them in sick licenses. It's like, oh, you want to use in that commercial? And that could make a bunch of money for the people that own the masters? Nope.

• 1:44:38David Rosenthal?

  Meanwhile, all this is playing out in the court of public opinion publicly.

• 1:44:42Ben Gilbert?

  Lots of people are listening to Taylor Swift. That's definitely happening.

• 1:44:45David Rosenthal?

  On July 13th, singer Kelly Clarkson tweets at Taylor, "Just a thought, you should go in and rerecord all the songs that you don't own the masters on exactly how you did them, but put brand new art and some kind of incentive so fans will no longer buy the old versions. I'd buy all the new versions just to prove a point." This tweet exists. We'll link to it. It's out there. Now here's what's really interesting. Where did Kelly come up with this idea? Well, it turns out that aside from being like a, you know, the great country artist herself, her mother-in-law at the time, I think she's since gotten divorced, but her mother-in-law at the time was Reba McIntyre. And Reba did this.

• 1:45:30Ben Gilbert?

  No way.

• 1:45:31David Rosenthal?

  Reba did this for several reasons with old albums, but certainly one of which that Reba had told Kelly was that by remaking albums from the earlier part of her career and releasing them later when she had a better record deal, she was obviously going to get more of the upside on that.

• 1:45:50Ben Gilbert?

  It's amazing. And on the one hand, you're like, come on, that's so much work. Who would do that? You have to invite back all your collaborators. You have to rerecord every single track because you can't use any of them. Your voice has changed. You're singing about all these exes. Do you really want to sing about them anymore?

• 1:46:05David Rosenthal?

  Poor Jake.

• 1:46:06Ben Gilbert?

  But Taylor is maniacal and on a warpath and she does it.

• 1:46:13David Rosenthal?

  Couple of weeks later, in August of 2019, Taylor goes on Good Morning America and announces that she's going to do this. So she doesn't reference the Kelly Clarkson tweet, but I think it's just as plausible as not that like this is where the idea comes from.

• 1:46:27Ben Gilbert?

  Not probable cause, but plausible cause.

• 1:46:29David Rosenthal?

  But Ben, to your point, other artists famously Prince had threatened to do this before, but like, this isn't something you do in a weekend. This is really, it's like making a whole new album. Like it is a lot of work.

• 1:46:42Ben Gilbert?

  And the release and the promotion, Taylor's time on this earth is short and her time of being a celebrity is shorter unless she manages to constantly keep reinventing herself and for her to dedicate prime years of her career to this project, going and spending all the time doing this instead of creating the next album, that shows how much she wants this.

• 1:47:05David Rosenthal?

  It's completely implausible that Taylor could.

• 1:47:09David Rosenthal?

  Recreate her old albums and keep making new albums, even anything close to the pace that she had been doing, right?

• 1:47:17Ben Gilbert?

  Yes. David, you're referring to this chart that I made last night. I made a rolling two-year average graph of the number of songs Taylor released to smooth out the curve, basically, since she used to release albums every other year. And it's basically 2006 to 2019, it's right around 10 songs per year that she was releasing. And then in 2020, she released 25, and in 2021, she released 46. She managed to release two brand new albums while also doing two re-releases during the pandemic.

• 1:47:45David Rosenthal?

  Best thing that ever happened to Taylor Swift, I guess.

• 1:47:48Ben Gilbert?

  So Lover's the first album on the new label, is that right? On Republic?

• 1:47:53David Rosenthal?

  Miss Americana comes out in January 2020. It's also really good. Go watch it if you haven't. But then there was a big tour planned for Lover, Lover Fest, that was gonna take all of 2020. That tour gets canceled.

• 1:48:08Ben Gilbert?

  And the crazy thing is she announced the rerecording plan even while Lover was gonna happen, the Lover Fest tour. So she was like, oh, yeah, sure, I'll be on tour all year and I'm gonna do this.

• 1:48:19David Rosenthal?

  I think this is one of the like, really good things that come from the pandemic.

• 1:48:23Ben Gilbert?

  Do you mean like Folklore and Evermore, or do you mean?

• 1:48:25David Rosenthal?

  Yeah, Folklore, Evermore, and Fearless, and Red, and

• 1:48:29Ben Gilbert?

  Yeah.

• 1:48:29David Rosenthal?

  And the Long Pond Sessions.

• 1:48:30Ben Gilbert?

  I'm always torn in trying to decide, why is she rerecording? Is it vindictive and emotional? Or is it because there's an enormous amount of money at stake if she does? And it's both.

• 1:48:42David Rosenthal?

  Definitely both.

• 1:48:43Ben Gilbert?

  But it is fascinating that she has this kind of dual motivation here, where one of them is, I definitely wanted to buy my masters. I'm kind of bummed that I couldn't get them. But oh my God, now Scooter has them, so I must wreck and destroy.

• 1:48:57David Rosenthal?

  So, surprise, November 2020, The Long Pond Studio Sessions comes out as a film on Disney+ where they all get together at Long Pond Studio in person for the first time and play the songs live, you know, there together, right around the same time in 2020. Irony of ironies, Ithaca and Scooter and Big Machine.

• 1:49:23David Rosenthal?

  Sells the asset of the masters of the first six albums.

• 1:49:28Ben Gilbert?

  Just Taylors.

• 1:49:29David Rosenthal?

  Big Machine, the operating company, all the other masters of other artists, they have everything that stays with Ethica Holdings. They sell only the Taylor masters to a private equity firm for about $300 million. So about the same price that they paid for all of Big Machine a year earlier.

• 1:49:47Ben Gilbert?

  And assuming that 80% of the revenue in that, so that they're, they're still left with some 20% chunk of the value. So it's a nice little markup in a year.

• 1:49:54David Rosenthal?

  There's some Rascal Flatts stuff and, you know, some others. I think there might be some Tim McGraw work that they have, you know. Anyway, the private equity firm that they sell it to is Shamrock Capital.

• 1:50:04Ben Gilbert?

  Which sounds innocent enough.

• 1:50:06David Rosenthal?

  Now, the minute I saw this, I was like, oh my God, because I used to work in, you know, media investment banking. And one of the things that, you know, we would talk to, one of the PE firms we would talk to would be Shamrock Capital. They did a lot of media deals because they started as the family office of the Disney family.

• 1:50:23Ben Gilbert?

  So crazy.

• 1:50:25David Rosenthal?

  Now, there's no direct connection anymore. Like, this is more just coincidence, but like, wow.

• 1:50:30Ben Gilbert?

  And it's Roy E. Disney, which is the son of Roy O. Disney. I think I have that right. Who was, he was the one who was kind of like agitating on the board and the CEO transition. If you've read Ride of a Lifetime. Interestingly enough, they did this without talking to Taylor. And if I were doing diligence on an asset where someone has announced that they intend to, on a warpath, devalue the thing that I'm buying, especially when I'm buying it at an appreciation to where it was most recently marked in the last year, I would probably call that artist and say like, should we do this deal? What would you do if we did this deal?

• 1:51:03David Rosenthal?

  Can we find a way to work together?

• 1:51:04Ben Gilbert?

  Apparently that doesn't happen. And by the way, just to underscore how unlikely it was that she would continue and go through and do this, there's a Stratechery article from April of 2021, so only nine months ago, where Ben Thompson says, "It's easy to see how this plays out going forward. Swift probably doesn't even need to remake another album. She's demonstrated her willingness and the capability to make her old records, and her fans will do the rest." But then she dropped Red.

• 1:51:32David Rosenthal?

  Ben wrote that when the Fearless Taylors version came out, which again, wasn't until April 2021. Back into December 2020, when Evermore comes out, because Folklore had come out just a few months before and was obviously huge. When Evermore comes out, T-Swift has concurrently, from these two albums, 22 of the top 50 songs on the Billboard charts.

• 1:51:59Ben Gilbert?

  It is remarkable, too, as you go and listen, how good the re-recordings are. They're both faithful to the originals in all the ways you'd want them to be.

• 1:52:07David Rosenthal?

  Oh, no, that's just Evermore and Folklore.

• 1:52:09Ben Gilbert?

  Oh, this doesn't include Red and?

• 1:52:11David Rosenthal?

  That does not include Fearless, yeah.

• 1:52:13Ben Gilbert?

  Whoa. Well, I do want to make that point, but it's not related. They're both faithful and better because she's matured so much as a singer.

• 1:52:22David Rosenthal?

  Yeah. So, April 2021, Fearless, Taylor's version comes out, debuts at number one, as did Folklore, as did Evermore. So Taylor becomes the first artist in history to have three albums come out, debut at number one in less than a year.

• 1:52:40Ben Gilbert?

  All graphs of Taylor Swift look compounding.

• 1:52:42David Rosenthal?

  There's never been a more up as it goes to the right, at least in her industry. We gotta talk about what she calls it, Taylor's version. It's brilliant.

• 1:52:52Ben Gilbert?

  It's so brilliant.

• 1:52:53David Rosenthal?

  Because what else is she gonna call it, like 2021 version? Or, you know, remake, remaster?

• 1:52:59Ben Gilbert?

  If you want to identify with Taylor, this is the version for you. Dear fanbase I've been cultivating for 16 years, if you love me, you'll listen to my version.

• 1:53:08David Rosenthal?

  And then, in November of this year, on November 12th, Taylor sends me a birthday present. Thank you, Taylor. It was a really, really nice birthday present. I didn't notice at the time because I had a one-month-old, but releases Red, Taylor's version. The Fearless, Taylor's version was so good. It's my favorite album. I loved it.

• 1:53:26Ben Gilbert?

  I mean, this has the 10-minute version of All Too Well.

• 1:53:28David Rosenthal?

  The 10-minute version.

• 1:53:30Ben Gilbert?

  The video associated with that, the other music video that came out that's directed by Blake Lively.

• 1:53:35David Rosenthal?

  The Saturday Night Live performance.

• 1:53:37Ben Gilbert?

  Yes.

• 1:53:38David Rosenthal?

  You know, Jake Gyllenhaal may have been a jerk to her 10 years ago, but like, come on, give the guy a break.

• 1:53:43Ben Gilbert?

  I mean, he just picked, he had bad timing.

• 1:53:45David Rosenthal?

  Yeah, that was bad timing, indeed.

• 1:53:48Ben Gilbert?

  There is a couple of points before we round out the story here that are worth making about her deal with UMG. And one of them will be straightforward and one of them will be a fun deep dive into Spotify history. So here's the straightforward one. Taylor negotiated maybe the best, most artist favorable record contract of all time. The way that her deal with UMG works is she actually maintains the ownership of her future master recording rights and she licenses them to the label. I own this the minute we press the album and you can use them. But that is not an unlimited period of time.

• 1:54:31Ben Gilbert?

  UMG only has the license up to 10 years, at which point she will regain full control.

• 1:54:37David Rosenthal?

  So they could go make UMG's version of folklore and everyone.

• 1:54:43Ben Gilbert?

  Actually, they couldn't because she owns the songwriting credits.

• 1:54:45David Rosenthal?

  That's right. Yes.

• 1:54:47Ben Gilbert?

  So Taylor has cut this just unfreaking believable deal. And Taylor's quick to point out, well, actually, the bigger part of the negotiation for me was this thing that I negotiated that involves all other artists benefiting from my contract. And what does that mean? Well, this is where we have to take a quick trip down memory lane. So think back to 2008. If you lived in the UK, you could use Spotify. I think maybe Germany. If you lived in the US, you couldn't. So it's this young emerging thing. It's got about 2 million users in the UK. You know, brush metal is in vogue.

• 1:55:25David Rosenthal?

  Yes.

• 1:55:26Ben Gilbert?

  Kind of looks like dark iTunes. Well, Spotify really, really needs the labels to play ball. And what are they going to do? Go SoundCloud's route and list a bunch of indie music on there? Like Daniel Ek has a specific vision for mainstream music listening happening in a streaming way. And so the three big labels and some indie labels collectively together get offered the opportunity to buy Spotify shares at an extremely favorable price. And so whatever the basis is, it's like trivially low. And they own 18% of the company. Huge amount. I mean, they're as big as a VC or bigger than any VC on the cap table.

• 1:56:06Ben Gilbert?

  And so they're incentivized to play ball for the foreseeable future and make this asset go up. They, from what I can tell, made a balance sheet investment. So it comes out of the shareholders' coffers. And fast forward to today, Universal Music Group is estimated to own about 3.5%.

• 1:56:26David Rosenthal?

  Wow.

• 1:56:26Ben Gilbert?

  So that today is worth about $1.5 billion at the current market cap, which is basically all a capital gain since it was a super, super low basis, super early investment. So UMG, unlike the others, never sold its share. So that's been great for the Spotify stock because it's appreciated the last few years since their IPO. So what did the other two big labels do? Well, Warner moved first and they gave some of the money to artists. They gave 25%.

• 1:56:54David Rosenthal?

  When they sold, they gave 25% of the proceeds.

• 1:56:56Ben Gilbert?

  Yes, of the sale proceeds of Spotify's stock. You might think, why are they giving any? Which is kind of a reasonable thing to think because they made a balance sheet investment. From what I can tell, they may have been given the shares, but I think it was an investment.

• 1:57:09David Rosenthal?

  Yeah, right. I mean, that seems like awfully generous in an industry that isn't exactly renowned for generosity.

• 1:57:17Ben Gilbert?

  Right. You might say, well, why are we transferring value from our shareholders to our suppliers effectively? Well, artists aren't just suppliers. This is a much tighter relationship. And in some ways, if by doing this, the labels actually accelerated the move to streaming, and it may not have happened otherwise, then the artists as a stakeholder group were sort of hurt by the labels deciding to collude, really, and do this because all three of them did it. So interestingly enough, Warner does this. They only give 25% of the appreciation, but they do it as a credit that will be recouped against earnings from albums. So they sell it and they say, this is great. You can have this as basically an additional advance

• 1:58:02Ben Gilbert?

  and you can pay us back for it. So that's kind of shitty. So Sony was kinder. They said that the money that they gave to artists was non-recoupable, totaling $250 million of a total windfall for all of the artists. This is about a third of their stake. So it's more than what Warner did and it's non-recoupable. In Taylor's negotiation as a sticking point in her contract with UMG, She forced their hand to do the best deal of any of the labels by far. It's not public, but people think it's at least the same thing that Warner did, 25%, but non-recoupable. And given the size of UMG's stake from the holding, that would mean something like $700 million would get distributed to artists with zero need to pay it back.

• 1:58:48David Rosenthal?

  Hmm, that's leveraged.

• 1:58:51Ben Gilbert?

  That is like some new customer coming to you and saying, by the way, in order to do business with us, not only do you need to give us a screaming deal, but you need to kind of change the way that your other existing contracts work that I have nothing to do with.

• 1:59:05David Rosenthal?

  And pledge this asset that has nothing to do with me?

• 1:59:08Ben Gilbert?

  Yes. Now, of course, she's going to make some money, but I think other people actually will be much larger recipients of the 750 million when it ultimately does get distributed.

• 1:59:16David Rosenthal?

  And certainly in terms of impact to those other artists who don't make as much as Taylor on an ongoing basis. So I said earlier that Taylor came around on streaming and streaming has actually been good to Taylor and Taylor's been good to streaming. What is the biggest part of that? Now, this was not in the works when Taylor did come back to Spotify, but has been huge for her. The Taylor versions, right? Imagine a world where streaming was not the primary paradigm through which customers consume music. Even the brilliant calling them Taylor versions, she'd still have to go convince people who

• 2:00:00David Rosenthal?

  already owned Fearless and Red to go rebuy the CDs.

• 2:00:03Ben Gilbert?

  Now it's very easy to swap it out in your playlist, or if you're just like, if you're not a playlister, you're just searching, you're like, oh, good, the newest one, Taylor's version, that sounds right.

• 2:00:11David Rosenthal?

  I've noticed, I don't, I can't imagine this is just for me, but if you ask your favorite virtual assistant to play Red or Fearless or All Too Well.

• 2:00:21Ben Gilbert?

  Are they playing Taylor's versions?

• 2:00:23David Rosenthal?

  Of course they're playing Taylor's versions.

• 2:00:24Ben Gilbert?

  Whoa.

• 2:00:26David Rosenthal?

  It was yet another factor that enabled Taylor to really do this remake strategy in a big way.

• 2:00:33Ben Gilbert?

  So Taylor Swift has an astonishing 200 million followers on Instagram, which makes her the 14th most followed in the world. But there are four people from a single family that are ahead of her. Who are they?

• 2:00:49David Rosenthal?

  Kardashians?

• 2:00:50Ben Gilbert?

  Yes. There's stardom and then there's ludicrous stardom. And it is amazing that there are so many places in this story where it's Taylor and her crew versus Kanye and his. And it's great, as I was just looking through, who has the most influence on Instagram? That just did like total reach that the Kardashian Jenner West, I know they're not together anymore, but that team Kanye has is nuts.

• 2:01:14David Rosenthal?

  Yeah. Wow.

• 2:01:16Ben Gilbert?

  I mentioned to you that Matsusha Electric came up again.

• 2:01:20David Rosenthal?

  Oh, yes.

• 2:01:21Ben Gilbert?

  In the research, and I'm sure at this point you can probably guess why.

• 2:01:25David Rosenthal?

  Universal Music Group?

• 2:01:26Ben Gilbert?

  Yeah. So Universal Music Group is now a totally separate entity, but at one point was part of MCA Universal, which Michael Ovitz sold to Matsusha.

• 2:01:36David Rosenthal?

  I didn't realize that they were still together at that point in time. I thought they had already been split out.

• 2:01:41Ben Gilbert?

  Yeah, totally crazy. So the, uh, fast forwarding all the way to today, UMG's owners are, uh, of course, it's publicly traded, but Vivendi still owns 10% of it. Vincent Belore, I don't, I'm not familiar with that, owns 18%. Pershing Square Holdings owns 10% as the famous, uh, Bill Ackman's recent, "Don't Call It a Spac" activity. Do you know who owns 20% of UMG that we have done an acquired episode on? And, uh, is a big part of acquired lore?

• 2:02:11David Rosenthal?

  Tencent?

• 2:02:12Ben Gilbert?

  Tencent.

• 2:02:13David Rosenthal?

  Yes. Which may have come as part of a swap with Tencent Music in that IPO, I think. Something like that.

• 2:02:21Ben Gilbert?

  Crazy how interconnected this web is.

• 2:02:23David Rosenthal?

  We don't yet have total earnings numbers for 2021 for Taylor. But as I mentioned earlier, her net worth estimated by Forbes in August of 2021 was 550 million, up from 365, less than a year before.

• 2:02:44David Rosenthal?

  So I think it's fair to say she had a pretty good 2021.

• 2:02:46Ben Gilbert?

  Totally.

• 2:02:47David Rosenthal?

  For a sense in the music artist industry, how she stacks up all time for just music sales alone. So we're not including touring, we're not including merch, like just like literally consumption of paid consumption of the music. Now, this does include streaming. It's been accounted for in here. So you can sort of compare eras here. Taylor is 31st of all time in highest pure music sales. Now, you might say like, 31, that's like, that's great. It's impressive. It feels a little low.

• 2:03:23Ben Gilbert?

  But I do think the way that the streams are counted is disadvantaged relative to the way that they used to count album sales because they equate 1500 streams to one album, which is a little bit like, okay, so you're sort of like saying that it's 150 listens per album, which might be a little bit generous. If like, did I ever listen to my CDs 150 times?

• 2:03:49David Rosenthal?

  Yeah. Okay. She is the only artist in the top 50 who started her career after the year 2000 and she started in 2006. Everybody else in the top 50 started at least one, if not multiple decades before Taylor. Now you look at other artists who started in the 2000s decade, the only others, there are three others in the top 100. Taylor's 31. The next is Adele at 66.

• 2:04:22Ben Gilbert?

  So this is like comparing LeBron mid-career to Jordan. If you're like trying to compare Taylor Swift now to the Beatles.

• 2:04:29David Rosenthal?

  Beatles are number one. Now, switching over to the touring side, the Reputation Tour is the 19th highest grossing tour of all time.

• 2:04:38Ben Gilbert?

  Including ones that run for multiple years.

• 2:04:40David Rosenthal?

  Well, that's the thing is like, when you factor in number of dates on the tour, it has significantly less dates. I think it has less dates than every higher ranks tour above it. And most of them, it has significantly less dates. The other thing I looked at here, which was pretty hard and fluffy is you can look at various publications have estimates on highest earning, you know, lists of highest earning artists for the year, and they all have different methodologies. And almost undeniably by any measure, 2016, 2019, 2020, and probably 2021, she will be the highest earning artist.

• 2:05:26Ben Gilbert?

  Totally amazing.

• 2:05:27David Rosenthal?

  Okay, that's my trivia. Now, I tweeted the other day that the first episode of season 10 has a direct connection to Standard Oil, and I bet nobody can get it.

• 2:05:40Ben Gilbert?

  So I bet a lot of listeners at this point know exactly what the connection is.

• 2:05:44David Rosenthal?

  But this is the most amazing part.

• 2:05:46Ben Gilbert?

  And we gave no hints. We've told almost no one about this.

• 2:05:48David Rosenthal?

  Almost no one, but one person.

• 2:05:51Ben Gilbert?

  Who guessed it outright, immediately and nailed it.

• 2:05:54David Rosenthal?

  Direct reply, nailed it, no inside knowledge, no awareness of what was happening. It's Christina from Vanta.

• 2:06:03Ben Gilbert?

  Amazing.

• 2:06:04David Rosenthal?

  That is how good she is.

• 2:06:06Ben Gilbert?

  Christina Cassioppo, that was a dead on guess, and it is scary how much you knew that The Last Great American Dynasty was indeed the linkage between the Standard Oil Trust and Taylor Swift.

• 2:06:21David Rosenthal?

  In 2013, of course, Taylor bought the property known as The Holiday House in Rhode Island. That was previously owned by Rebecca Harkness and Bill Harkness, one of the direct descendants of the Rockefellers, inheritor of Standard Oil fortune.

• 2:06:37Ben Gilbert?

  Heir to the Standard Oil name.

• 2:06:39David Rosenthal?

  There's a lot of fun stuff out there about Rebecca, and she was eccentric. She funded lots of stuff in the arts, particularly dance. The stories in the song about stealing the dog, dying at Key Lime Green, definitely did not steal a dog, may have died a cat, Key Lime Green. But there was some poetic license taken in the song.

• 2:06:58Ben Gilbert?

  David, I'm moving us on.

• 2:06:59David Rosenthal?

  All right, let's move.

• 2:07:00Ben Gilbert?

  It's great.

• 2:07:02Ben Gilbert?

  All right, Seven Powers. So as longtime listeners know, we are adapting using Hamilton Helmer's Seven Powers framework, which is an analysis of what enables a business to achieve persistent differential returns. In other words, how can it be more profitable than their closest competitors and do so sustainably? So David, I guess let's think about Taylor as a business, not about like her previous rights or UMG as a business, but like the business of being Taylor Swift and having all the assets she does and all the control that she does over what she controls and not over what she doesn't control. So you're Taylor, that's the analysis.

• 2:07:42David Rosenthal?

  I think that's the only scale that we can really analyze this on. Anything else feels too small. Of course, so the seven powers are counter positioning, scale economies, switching costs, network economies, process power, branding, and cornered resource.

• 2:07:56Ben Gilbert?

  Branding is a no brainer. Like if I heard a song and then was told that it was Taylor Swift, first of all, she's recognizable enough where I probably could guess. But if I didn't guess, such as in, uh, what's the song where she was pseudonymous?

• 2:08:11David Rosenthal?

  The Rihanna Calvin Harris song. Yep.

• 2:08:14Ben Gilbert?

  Yes. She of course wrote that and is singing in that, but is not named. I never knew that before. It brings up the value of the song to me and 100 million other people.

• 2:08:24David Rosenthal?

  Yep.

• 2:08:24Ben Gilbert?

  So she's definitely got branding power going on. I suspect the biggest one she's got is scale economies.

• 2:08:31David Rosenthal?

  Oh, you think scale economies?

• 2:08:33Ben Gilbert?

  Well, I look at it as the scale of value she's producing in the world because so many people are consuming her music. She has the opportunity to take advantage of scale economies and bring stuff in-house that no other artist could bring in-house. She's not necessarily doing that, but I think the fear that she could do that is one way that she got the deal that she did where she actually owns the masters and licenses them to the labels.

• 2:09:00David Rosenthal?

  Right. Like we were talking about, the only reason she keeps a label around at all and didn't go do it herself is probably just convenience at this point.

• 2:09:10Ben Gilbert?

  Yes. They made it cheaper for her to do that or as cheap as actually doing this in-house, which would require her scale to be able to do in-house.

• 2:09:18David Rosenthal?

  Yeah. Okay. I can buy that.

• 2:09:20Ben Gilbert?

  I think definitionally, she also has switching costs because the CEO of Spotify, when she was not on Spotify, was flying to the US to negotiate for her to get back on. Clearly. You can't substitute a replacement and have equal value.

• 2:09:35David Rosenthal?

  Which I think also implies cornered resource. Does she have network economies with the fans and the Swifties?

• 2:09:43Ben Gilbert?

  The fans with each other?

• 2:09:45David Rosenthal?

  Maybe. I mean, to the extent that like, stuff like this podcast that we're doing, like the fact that the fans do so much, there's so much YouTube content and podcast content about Taylor.

• 2:09:55Ben Gilbert?

  Oh yeah. Search Taylor Swift in a podcast player. There's a lot of Taylor Swift podcasts.

• 2:09:58David Rosenthal?

  Yeah. Maybe. I don't think it's strong network economies, though.

• 2:10:03Ben Gilbert?

  If I were to take away the framework for a minute and say, where does Taylor's power comes from? It's the relationship with the fans, which she's built over all these years and all the tiny little micro interactions that she's built to build the brand that she's built with them. And then it comes from her process to be creative, which I don't think she has a specific process. I think she has a way of existing in the world that enables her to continually be creative in different ways. And those things I think are probably hard to fit into the powers framework, but those to me are the two big reasons that she's able to wield a pretty big sword in all of this.

• 2:10:43David Rosenthal?

  The latter of those, I think, is exactly process power, right?

• 2:10:47Ben Gilbert?

  It's kind of like Paki's process power, where it's like, I can't really explain it, but it, and she even says in the tiny, the NPR Tiny Desk session, she's like, by the way, this song, which I think she's talking about Lover, she's like, it felt like cheating to write because I did no work. I woke up in the middle of the night. I went over to my piano. I started voice memos and I played the chorus basically exactly here as you hear it on the album. And it felt like cheating because usually songwriting takes work. And then she kind of caught herself. She's like, actually, songwriting is completely different every time and there's no process for it.

• 2:11:20David Rosenthal?

  Probably everybody listening has a smartphone, has voice memos, if it's an Apple phone or some equivalent on Android.

• 2:11:31David Rosenthal?

  Probably can get access to a piano. And yet you cannot write like Taylor Swift.

• 2:11:38Ben Gilbert?

  All right, playbook.

• 2:11:39David Rosenthal?

  Oh, so much to talk about in playbook. I feel like you have a bunch. You want to start?

• 2:11:43Ben Gilbert?

  Her productivity has been skyrocketing and her skill and the complexity of her songs has also been increasing. I think if you go look at any rankings, Rolling Stone has a ranking of every single one of Taylor Swift's songs. The top 10, 20, 30 is pretty loaded with recent stuff. So she's sort of like on two different axes, on quality and quantity increasing. And so she has this like unbelievable quadratic effect to the value that her music creates in the world, if you want to phrase it in a really sterile way, but the impact that her music has and the amount of emotion she's able to create for people, which I think is just remarkable.

• 2:12:26David Rosenthal?

  Amazing observation. I love the way you phrase that. I think that's Swiftian.

• 2:12:30Ben Gilbert?

  Taylor, if you're listening, I'm sorry that I called your music value.

• 2:12:34David Rosenthal?

  I can't recreate it.

• 2:12:35Ben Gilbert?

  Because so many of these are like undeniably laudable for Taylor, there's one that I want to call out that's worth throwing in. She's able to bend the truth a little bit or tell a specific version of the truth a little bit that usually ends up to her benefit. And often it benefits everyone involved. Sometimes it doesn't, but I mean, there's a bunch of different examples of this. One being she initially said Kanye didn't call for approval, which we know he did, but just not the full approval. Okay, fine. She said she woke up to finding out at the same time the rest of the world did that her albums were sold. According to Big Machine, they'd sent her a text the night before. Maybe she didn't see it. Of course, her dad was also a major shareholder.

• 2:13:18Ben Gilbert?

  Okay, he didn't show up to the meeting, but there's a little bit of like, she wanted to tell a clean story there. Another example, she was never offered the chance at her masters that she had to earn them back one at a time, not totally clear. Maybe she could have put in an offer to buy them. This is my worst case scenario. Is it really? Or is that the most dramatic way to put it? And I don't think any of these things are necessarily untruthful. There's a very good chance all this is the way that she perceives these in her head. So she is speaking the truth as she experiences it, but it is a, she's very good at finding the version that she can tell the world that has the most possible impact. And as we've said many times, she is a tremendous storyteller.

• 2:14:00David Rosenthal?

  You know what this is?

• 2:14:03Ben Gilbert?

  What?

• 2:14:03David Rosenthal?

  There's like, nothing more acquired than what this is. It's a reality distortion field.

• 2:14:08Ben Gilbert?

  Oh, she's the Steve Jobs of music?

• 2:14:10David Rosenthal?

  Absolutely.

• 2:14:13David Rosenthal?

  She totally is.

• 2:14:14Ben Gilbert?

  I think she's the Michael Ovitz, too. There are so many ways that she leverages her self-appointed position as the music industry's resident loud person to beat up the centralized power and benefit the artists.

• 2:14:26David Rosenthal?

  Totally.

• 2:14:27Ben Gilbert?

  One big one that I have that is gonna spiral here a little bit, and then I'll hand it over to you afterwards, is the litany of disruptions that happened, like actual low-end disruptions, like Christensen-esque, that led to where we are today, and Taylor's remarkable ability to use them as catalysts for herself and jump on new things. So it's cheaper than ever to record your own music. It's cheaper than ever to produce and mix your own music. You have the opportunity by going viral to get an insane amount of free marketing on places like TikTok, where she's always commenting back and forth with fans, or Spotify playlists, or-

• 2:15:03David Rosenthal?

  Tumblr, Twitter, yeah.

• 2:15:05Ben Gilbert?

  Then, of course, distribution, in addition to marketing, is also free, since you no longer need to print CDs or mail them. And then on top of that, retail stores don't really exist, so there's no retail markup. So this and the rise of social media, all at the same time, the fact that the VMAs incident wouldn't be the VMAs incident without Twitter, like, that was a catalyzing event of why everyone was talking about this.

• 2:15:30David Rosenthal?

  It's like the tree falling in the forest problem. Kanye grabs the microphone and there's no Twitter. Did it happen?

• 2:15:35Ben Gilbert?

  Yes. So there have been, like, a compounding set of waves that have all collapsed, and she has been very effective at making sure to ride where they all peak together.

• 2:15:44David Rosenthal?

  Yeah.

• 2:15:45Ben Gilbert?

  All right, so that was my big, long one. Over to you.

• 2:15:48David Rosenthal?

  Okay. First one that we talked about in the beginning of the episode is, like, the whole teenagers don't listen to country music narrative. Who wouldn't love country music? It's music and storytelling. People love music, people love stories. It's just that nobody was making country music for teenagers. She showed up, she made country music for teenagers.

• 2:16:05Ben Gilbert?

  Yeah.

• 2:16:06David Rosenthal?

  And you see that all over the tech industry and startups and et cetera. To the reinvent or die, there are two aspects to this. I have so much respect for her reinventing herself, literally every single time. Like, that is so hard to do for an artist, for a company, and yet, if you don't do that, you die. I think it's also even- Harder for women to do that, like women artists specifically? Like, I think that male artists and bands and the like can get away with not having to reinvent themselves for longer.

• 2:16:38Ben Gilbert?

  Yes.

• 2:16:38David Rosenthal?

  And they don't have the, you know, turning 30 or turning 35 problem where they're no longer sex symbols.

• 2:16:43Ben Gilbert?

  And this is all stuff she says in Miss Americana.

• 2:16:45David Rosenthal?

  Yeah. So not only is she like best in the world at doing this, like she does it with the deck stacked against her in a lot of ways. And then three, which is totally an acquired theme, or we aspire to be, she treats her audience like they're smart.

• 2:17:01Ben Gilbert?

  Yes.

• 2:17:02David Rosenthal?

  And so few other people do at the scale that she does.

• 2:17:06Ben Gilbert?

  She understands the power and the value of her audience and she spends a remarkable amount of time catering to them and building things for them and interacting with them. To my original point on the way that she tells her favorite version of the truth in some of these situations to create the largest impact, I think the savviest people in her audience could be spoken to in a little bit more of a nuanced way.

• 2:17:29David Rosenthal?

  Right. When you think of how she speaks to 200 million people versus how, you know, traditional media used to speak to 200 million people, like it's very different.

• 2:17:38Ben Gilbert?

  Yes. Follow me on this one. The free download in 99 killed the CD sale, which was the cash cow of the industry. I mean, for everyone, artists, labels, everyone. So then iTunes comes along and individual song purchases start to save it, but don't nearly make up for the lost revenue. Streaming takes off like crazy and then CDs really stop selling. So the primary revenue driver for labels and artists is gone. Streaming makes some money, but that revenue generated from streams that goes to the labels to be divvied up doesn't nearly match what the CDs matched in revenue. So there's this big sort of like missing revenue gap.

• 2:18:19Ben Gilbert?

  So all the revenue shifts toward performance royalties then?

• 2:18:24David Rosenthal?

  Mm-hmm.

• 2:18:24Ben Gilbert?

  So we're in this situation where In order to make money, it's touring and it's merch at this point, since streaming doesn't make a lot of money and CDs are dead. So, record companies then, interestingly, got obsessed with, did you hear about the concept of the 360 deal?

• 2:18:40David Rosenthal?

  Yes.

• 2:18:41Ben Gilbert?

  So they're trying to capture revenue, even if they're not helping you create the album and you're overproducing revenue on your own on their side. They're like, oh, we're your label. So, you know, we're, we're involved in everything your brand does.

• 2:18:52David Rosenthal?

  And we're gonna help you do everything, blah, yeah, sure.

• 2:18:55Ben Gilbert?

  So where does this leave us? Basically, what it means is the industry is just gonna have to make it up on volume. But because streaming pays out so much less, we're just gonna need a lot more streams. Now, is this gonna happen? Here's where there's an interesting argument, and this, the, the Donald Passman book is so good in bringing up two points in the introduction. And these two points are, at the peak in 1999, an average CD buyer spent about $45 per year on CDs. Today, with streaming averaging $7 a month, that average spend per customer has gone up to $84. So you have almost a 2X in terms of consumer spend. Now, let's look at like, the number of consumers that are doing this.

• 2:19:37Ben Gilbert?

  Well, in the old days, when you were done with your twenties, you basically stopped buying records. And you stopped buying CDs. You kinda had your musical taste, you had your collection, you weren't really listening to the new stuff anymore, and you certainly weren't buying it. You only ever heard it on the radio, which was free. And today, people of all ages are paying for streaming every month, from like, you know, four-year-olds listening to stuff that four-year-olds listen to on Spotify, all the way to like, you know, grandma having a Spotify subscription.

• 2:20:07David Rosenthal?

  Can confirm. Children like music.

• 2:20:09Ben Gilbert?

  So there's like, very real TAM expansion, both in terms of the amount consumers will spend as everyone fully shifts to streaming, and the number of people who will behave that way. So, it's just sort of about like, okay, well then, how do we divvy up those dollars? Cause there should be more dollars than ever flowing in.

• 2:20:27David Rosenthal?

  Look at you. Daniel X should've come and talked to you before he talked to Taylor.

• 2:20:31Ben Gilbert?

  Well, all, all credit goes to Donald Passman.

• 2:20:35David Rosenthal?

  Fair enough, fair enough.

• 2:20:36Ben Gilbert?

  All right. So my last one that I want to dive into a little bit here are that advances, interestingly, are a clear sign of a power law dynamic where you mentioned it's like book publishing. We talked about how it's like venture. It's the same thing in all these things, music, books and startups, where having the big winners in your portfolio is really what matters. At one point, I had a book agent tell me that America basically picks one book a year to all read together. You know, it's the Michelle Obama book, or it's whatever it's going to be. And you don't know what that's going to be ahead of time. And so you kind of don't really care that much about recouping your advances on the losers. All you care about is making it so that in your portfolio, you get the

• 2:21:17Ben Gilbert?

  book that America reads every year. And it's just so similar to venture capital. And the way that the payback works is so similar to where, okay, an advance, and then you recoup against the royalties. Well, what's preferred stock? You know, the first X amount goes to the capital provider, you know, in exchange for the capital they have provided. And then they participate with some split in whatever outcome is after that. And I don't want to quite get into the nuances of like participating preferred and how it's slightly different. But the fact of the matter is, these contracts that seem predatory, and I'm not going to argue yet that they're not predatory, but what they're doing is basically making sure that they cover their losses. And there's this interesting human

• 2:22:01Ben Gilbert?

  nature thing where if you look around and you're the winner, and you realize you're the one subsidizing everyone else, it's really easy to forget that you had an equal chance of failing if someone was to underwrite you. So you're like, why am I paying so much back to this original capital provider? I hate being locked into this deal. But that deal was theoretically whatever the market clearing price was in order to take the risk on you as a young startup, author, or artist. And the only place where this falls down, which I think is what I want to do this episode instead of value creation, value capture, is in order for this really to be fair, in order for these terms to truly be market price.

• 2:22:44Ben Gilbert?

  You need the labels to not be making a ton of profit. If they're very profitable on like a free cash flow basis, like all the way full bottom line, if they're printing money, then what you could say is, geez, this is an oligopoly. There's only three people here, so there's not actually a good competition among the people that want to give you money as an advance in order to, you know, do all the stuff that a record label does. These businesses aren't that good of businesses, but like-

• 2:23:15David Rosenthal?

  It's an oligopoly.

• 2:23:16Ben Gilbert?

  It's an oligopoly.

• 2:23:17David Rosenthal?

  Yeah. It's just like the old school VC industry when there were like five firms. And of course they got great deals because there were five firms and now it's way more competitive and founders get way better deals.

• 2:23:28Ben Gilbert?

  And to underscore the power law, the stat is that last year, the earnings of the top 1% of artists in each music category accounted for 78% of revenue of all music sales.

• 2:23:38David Rosenthal?

  It's power law.

• 2:23:39Ben Gilbert?

  It really is.

• 2:23:40David Rosenthal?

  That looks like 80/20 to me.

• 2:23:41Ben Gilbert?

  Yes. All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 2:23:56David Rosenthal?

  Yep. It's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 2:24:12Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 2:24:27David Rosenthal?

  And that's how you get features that customers love, like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Logora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 2:24:51Ben Gilbert?

  And they recently launched Logora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective, then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 2:25:10David Rosenthal?

  And Logora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Logora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Logora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 2:25:40Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at logora.com/acquired and just tell them that Ben and David sent you. Okay, so grading.

• 2:26:07David Rosenthal?

  It's kind of weird. We're like grading Taylor here.

• 2:26:10Ben Gilbert?

  So streaming did save the music industry, sort of. I mean, more money was made by the music industry in paid streaming subscriptions alone in 2020 than the entire industry made across all formats in 2015. Streaming is a gigantic revenue driver. But to be honest, none of the dollar figures in anything that we've talked about are actually that big. The music business is like just small compared to the software businesses that we cover. And here was like the way that I want to show that, David, is would TechCrunch even cover a $300 million exit?

• 2:26:46David Rosenthal?

  No. I mean, if they would, nobody would read it, right?

• 2:26:48Ben Gilbert?

  Right. It's like, sure, there might be a TechCrunch article. It wouldn't be the biggest deal that day, certainly.

• 2:26:55David Rosenthal?

  No.

• 2:26:55Ben Gilbert?

  There may be investment amounts into companies larger than that. And here, we hinge the whole thing on this gigantic exit of Taylor's music catalog for $300 million. Like, it's just not that much money.

• 2:27:09David Rosenthal?

  We had Sam SBF from FTX on, who's younger than Taylor, and, you know, awesome, that was a great episode. And I love at the end when he was like, Mario asked him what he feels about our current age, and we live in the age of social media. Nowhere is this more applicable than the current episode. He's the wealthiest person, I think, under 30 in the world.

• 2:27:32David Rosenthal?

  Because he works in technology and started a cryptocurrency firm.

• 2:27:37Ben Gilbert?

  Well, he works in modestly regulated finance using technology. Yeah.

• 2:27:41David Rosenthal?

  Taylor, for everything we've just discussed over a long period of time, is worth half a billion dollars. That's a big disconnect, it feels like, relative to like influence versus economics.

• 2:27:53Ben Gilbert?

  Celebrity does not equal economics.

• 2:27:55David Rosenthal?

  Yep.

• 2:27:56Ben Gilbert?

  And so just looking at some other deals, Bruce Springsteen's entire catalog just sold for $500 million. John Legend, mid-career, just sold his. There wasn't a number attached to that. Even Bob Dylan's entire catalog of more than 600 songs was around $300 million. So you're like, okay, well, maybe the music royalties just aren't worth that much. The entire industry of recorded music is only a $14 billion industry. That is less than 1/10th of the video game industry, which is $170 billion. Music just is not that big. And if you look at the music industry as a whole, which includes tours, okay, it's a $40 billion industry.

• 2:28:38David Rosenthal?

  Still not that big.

• 2:28:39Ben Gilbert?

  Which even that big number is about 1/10th of Apple's revenue.

• 2:28:45David Rosenthal?

  Right.

• 2:28:46Ben Gilbert?

  All the money anyone makes on anything in music every year is about 10% of what Apple makes just in revenue on their products. And my favorite way to tie this all off is the entire music industry's revenue, that's including all the concerts and touring and everything, is about equivalent to Best Buy's revenue. Or if you want another comp, American Airlines.

• 2:29:12David Rosenthal?

  Oh, wow. Best Buy actually, I feel like, has done a pretty good job, as of late, you know, staying alive and relevant.

• 2:29:18Ben Gilbert?

  Yes.

• 2:29:19David Rosenthal?

  Wow. That's such a good point.

• 2:29:22Ben Gilbert?

  Crazy.

• 2:29:23David Rosenthal?

  I hear that and I feel like there's more opportunity for Taylor and other artists to do other things and make more money.

• 2:29:30Ben Gilbert?

  Or just gotta find a better way to monetize music. I mean, it is such a meaningful part of all of our lives.

• 2:29:37David Rosenthal?

  Maybe this is part of the motivation of Miss Americana and the Long Pond Studio Sessions and the All Too Well short film of like, Taylor's tried, she's been in a bunch of movies as an actress and like, you know, that's not like, obviously going to be a big thing for her, but like, she can make her own movies, do her own deals with Netflix, maybe that's a way to make a lot more money.

• 2:29:55Ben Gilbert?

  There's a thing to grade that's not like all of Taylor's career, so it's probably worth doing, grading Ithaca's purchase of Big Machine. There's another one that's grading Shamrock's purchase of Taylor's masters. And then there's a third one, which is, what price would you pay for those masters today? Which I think is sort of a fun one. It's not quite grading, but Big Machine selling when they did was a great decision. And Big Machine shareholders should be excited by that.

• 2:30:25David Rosenthal?

  It was A, the only decision and B, selling while Taylor was still friendly.

• 2:30:32Ben Gilbert?

  Amazing.

• 2:30:33David Rosenthal?

  Still amicable relationship with Taylor. Yeah, absolutely right move.

• 2:30:36Ben Gilbert?

  By the way, just for fun, I did a calculation on if you own 3% of Big Machine, like Scott Swift allegedly did at the time of the sale, you would have turned your 120K of initial investment into $9 million by selling to Scooter Braun, which represents a 75X.

• 2:30:57David Rosenthal?

  Not bad, not bad.

• 2:30:58Ben Gilbert?

  Not bad. Now, was that a good decision for Ithaca? Well, they made a pretty quick buck by flipping 80% of that 300 million, also for 300 million then to Shamrock.

• 2:31:13David Rosenthal?

  They got their principal back quickly.

• 2:31:14Ben Gilbert?

  Yes, and more. I mean, they own whatever, you know, the value of the remaining 20% of the assets are. But now, if you're Shamrock, I don't think I would pay $300 million.

• 2:31:26David Rosenthal?

  It feels like a pretty bad deal.

• 2:31:27Ben Gilbert?

  There has never been a more overvalued asset in the music industry than the masters for Taylor Swift's original albums at 300 million today. Not only is she actively devaluing them, but the whole industry is at complete peak for what people are willing to pay for assets. Like, some people are even calling it a bubble in the music industry, just like they are in public equities or in startups. I think Shamrock and the Disney family are going to be left holding the bag on this investment that they'll never recoup, which is the great irony of Taylor Swift not recouping.

• 2:32:00David Rosenthal?

  Right, right. Oh, boy. It certainly seems that way. I mean, yeah, things could change, but how? Taylor's committed to this project now. Like, even if Taylor and Shamrock were to smooth things over and have good relationships again, she's remaking them. She's gonna want the new versions.

• 2:32:21Ben Gilbert?

  Maybe. There still may be some deal that can be cut where you're like, I want Scooter out entirely, sell me this thing, or I'm gonna make it worth, you know, $30 million to you, and she might be able to buy him for a bargain basement price and stop doing this. But that's what Ben Thompson thought before Red came out.

• 2:32:38David Rosenthal?

  It also, it's, I don't know, it seems like she's an artist. She creates and she enjoys it. It seems like she's enjoying doing this.

• 2:32:44Ben Gilbert?

  I think that's right.

• 2:32:45David Rosenthal?

  Yeah, seems like a pretty bad deal for Shamrock.

• 2:32:47Ben Gilbert?

  All right, what do you want to grade?

• 2:32:49David Rosenthal?

  Hmm.

• 2:32:50Ben Gilbert?

  Taylor Swift's career, unprecedented, unbelievable, A+, like, my god, and the change that she's affecting along with it, amazing. I mean, it actually kind of reminds me of like Elon Musk, where people love to hate on Elon Musk because, oh my god, he's so rich and look at all this money he's making. He's making all this positive change for the world, at least I believe that, and getting rich while doing it, which you probably should be if you're making the change on the level that he's making. And like, do I care that Taylor Swift is benefiting from all these deals while also advocating for artists? No, I think, I kind of think she should. So I have no grapes with that. I

• 2:33:31Ben Gilbert?

  mean, shocking, the two people who host this acquired podcast about technology and capitalism.

• 2:33:37David Rosenthal?

  No grapes with somebody making money, yeah.

• 2:33:39Ben Gilbert?

  Musically.

• 2:33:40David Rosenthal?

  We have anti-grapes with it.

• 2:33:41Ben Gilbert?

  Productively, financially, and the way that she's affecting change, it's just an A+.

• 2:33:48David Rosenthal?

  Yeah, she's a genius. No other way around it.

• 2:33:50Ben Gilbert?

  All right. Quick carve outs. I can't recommend strongly enough the Beatles documentary.

• 2:33:55David Rosenthal?

  Oh, nice. Oh, I gotta watch that.

• 2:33:57Ben Gilbert?

  By Peter Jackson, Get Back. It is like hanging out with ghosts is the best way I can describe it. The original footage, and it's clearly restored because it's like very high quality footage of John, Paul, George, and Ringo. And you're spending, it's like eight hours, it's many hours cut across three parts. You're just hanging out with them while they are creating an album from nothing in a matter of a month. And it is especially for those of us who grew up seeing pictures of the Beatles, listening to the Beatles music, and only ever seeing like a little video here or there and usually poor quality. I think for the first hour of it, I was just spending like being in a state of shock that I was just hanging out in a room informally with the Beatles.

• 2:34:40David Rosenthal?

  For mine, I've got a fun one that we've talked about much over on the LP show. Go check it out on the LP, the now newly public LP feed for everyone. And we are both wearing right now italic.

• 2:34:53Ben Gilbert?

  Yes.

• 2:34:54David Rosenthal?

  We did a little partnership with them for some acquired gear for recent guests and us and our significant others. And it's just such high quality stuff. I love it. It's great.

• 2:35:06Ben Gilbert?

  Yeah, totally agree.

• 2:35:08David Rosenthal?

  All right, listeners, now is a great time to talk about one of our favorite companies, Statsig.

• 2:35:15Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI-powered experiences at scale.

• 2:35:25David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 2:35:46Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags, and product analytics into one unified system. So teams can ship safely, test rigorously, and directly link what they changed to how users actually behaved.

• 2:35:58David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/acquired to get started.

• 2:36:09Ben Gilbert?

  All right. Well, listeners, with that, if you're not in the Slack, you should be.

• 2:36:16Ben Gilbert?

  Honestly, I've met so many awesome people there and it's really cool to learn from so many of you. And if you like talking about the news of the day with an intelligent group of people who are into the stuff you're into, you should join at acquired.fm/Slack. I will take the episode off from telling you to become an LP this time, to just say, if you've always thought about it, but don't know what that sort of content is, that content is all public from the back catalog now and the new stuff is just available to LPs for a couple of weeks. So go look at the whole back catalog and we'll put a link in the show notes or just search acquired LP show in any podcast player. Including Spotify. We've got a job board. It's great. You should join that if you're looking for

• 2:36:59Ben Gilbert?

  something new or feel free to submit jobs on there. We only pick the ones that David and I think are interesting. So if you want a view of what we think the interesting jobs are, go to acquired.fm/jobs. And then lastly, if you want to tweet about this, we would love that. We actually would love it even more if you just share one-to-one with your friends because we think that strong connections are the best connections. And you can find us right along Taylor Swift on Spotify and in all of your favorite podcast players.

• 2:37:28Ben Gilbert?

  Literally right next to Taylor Swift. Immediately next to Taylor is acquired. With that, we will see you next time. We'll see you next time.