‘It’s a hangover’: Taylor Swift makes history as music business creaks

While Taylor Swift's success is growing, the music industry as a whole is struggling. Photo / Getty Images

Taylor Swift made history yesterday NZT by winning music’s most coveted prize, album of the year, for a fourth time.

She became the first artist to do so since the Grammy Awards were created in the 1950s and leapt ahead of legends such as Frank Sinatra.

Behind her commercial and cultural triumphs, however, is a music industry that feels far less assured this year.

Swift was already the toast of Los Angeles this week, as music’s most influential executives and artists gathered for events surrounding the industry’s biggest night.

In addition to the ceremony’s glitz and red carpets, the Grammy Awards hold business implications, with winning artists usually receiving a boost to sales and streams as well as more leverage in future contracts.

Swift, whose sales made up an estimated 2 per cent of the entire United States music business last year, bigger than the entire genre of jazz or classical music, was crowned the industry’s most powerful person by Billboard — a recognition the music publication has typically given to male executives.

At 34, Swift defeated a room full of them, including her own label head, Universal Music chief executive Lucian Grainge, who was dethroned to the number two position in Billboard’s rankings.

“I’ve never, ever in my entire career been so thrilled to be number two on a list,” quipped the ultra-competitive Grainge.

Yet Swift’s success is an anomaly, rather than a bellwether for the rest of the business.

Universal, the industry goliath Swift is signed to, is set to lay off hundreds of staff in the coming weeks.

The company is not throwing its annual pre-Grammys artist showcase, a typically lavish event, for fear it would appear insensitive amid the cuts, according to people familiar with the matter.

The chief executive of one large music company described the mood in Los Angeles this week as “a hangover” after several years of roaring growth. “We’re in a different phase now,” the chief executive said. “Let’s face it”.

Other music companies have also been cutting jobs — notably Spotify, the streaming service that fired more than 2000 workers last year. Warner Music last March cut about 4 per cent of its staff, or 270 jobs, while publisher BMG laid off roughly 40 employees in October.

The music industry is still growing, but at a slower pace than it had boasted in previous years when streaming was in an earlier phase.

In the nine months to September 30, 2023, Universal’s revenue rose 7 per cent year over year. In comparison, its revenue growth in the comparable period of 2022 was 24 per cent. Other music groups are experiencing similar slowdowns.

Meanwhile, anxiety over artificial intelligence has swept the music business in recent months, while two industry pillars, Universal and TikTok, are in an all-out brawl over money. After heated licensing negotiations broke down, Universal took the dramatic step last week of pulling its music from TikTok.

In a sign of how far relations have soured, the two companies traded barbs publicly in the past few days. TikTok described Universal’s move as “greedy” and “self-serving” while Universal accused the Chinese social media group of “bullying”.

Starting last Thursday, Swift’s music was being systematically removed and muted on TikTok, with songs from Universal’s vast stable of stars such as Ariana Grande, Drake, Lana Del Rey, ABBA and Olivia Rodrigo. Fans are already resorting to using covers of their favourite songs to soundtrack their TikTok posts.

Noah Kahan, a breakout star nominated for Best New Artist at the Grammys, expressed anxiety over his label’s decision. “I won’t be able to promote my music on TikTok anymore ... I’ll probably be okay, right?”, he said in a post to the app. “I’ll land on my feet, right? Right?”

Written by: Anna Nicolaou in Los Angeles

© Financial Times