Even Millennials can feel the sting of trading their intellectual property and then losing control. Who’s minding all the YouTube stars of tomorrow?
Taylor Swift was a sad and angry 29-year-old last week. She had a right to be.
The people who made her a star back in her teens sold their label to a promoter she despises. He now owns her entire catalog and can exploit them as he likes. While the checks will keep coming, she now faces the prospect of enriching her enemy at the same time.
He’s going to profit from her adolescent work until he decides to let her go. That could be a long, long time.
It’s too late for her, but the people managing the celebrities of tomorrow need to learn from her example.
What Taylor did
The label gave Taylor a pretty good split of the money her albums made, but it owned the master tapes with no provisions built into the contract for her to earn the rights back.
At the time, she trusted the people running the label. The problem there, of course, is that people come and go.
After a few years, rumors started that the label could be up for sale at the right price. The Taylor Swift catalog was the main asset at stake.
She started getting nervous and tried to find a way to buy back the albums, but ultimately ran out of time. Now she’s trapped in a relationship she doesn’t enjoy.
And when you’re worth over $300 million at age 29, there’s zero incentive to stay in a relationship you hate. That’s the moral lesson a lot of her songs teach, after all.
But the songs also walk the line between fighting for what you want and letting go. She’s stuck until the rights come up and she can win them back.
In the meantime, she can take revenge by keeping younger artists from repeating the mistake. Here in the social media universe of Twitter celebrities, that could be anyone.
Teenagers become stars all the time online and build something like a body of work. Some YouTube videos go viral, at which point intellectual ownership becomes meaningful.
It could happen to any of us. Taylor brought her tapes in and got produced. Kids today just sign a blanket release with YouTube and start collecting the ad revenue.
They can pull the videos any time. Years from now, the hosting platforms may exploit the material for their own promotional purposes that nobody has even thought about yet.
It’s worth making room in the contract for resolving issues that aren’t explicitly laid out. What happens when the company gets sold or when the performer wants to buy out?
Good contracts create space to answer those questions. Taylor could have negotiated right of first refusal in the event of a change of corporate ownership.
At the time it would have been purely hypothetical, just a cosmetic scenario. The label would have been happy to build it into the paperwork. Nobody was thinking about a sale then.
That’s the problem. Companies get bought and sold all the time and the assets change hands. It’s part of life. But nobody was thinking about it when Taylor’s father signed over the rights.
She’s no longer a partner
Taylor’s father is her business manager and was also a minority shareholder in the label, with at best a 4% stake in the sale.
He opted out of the acquisition negotiations because it looked like a conflict of interest to hear about talks that could affect his daughter / client.
That’s right. It was a conflict of interest, but if she was in the partner chair instead, it never would have happened.
Again, it’s water under the bridge at this point. Dad has been squeezed out of the new company and there probably wasn’t any way she could’ve made much stink before the sale.
She’d already left the label and those old albums behind. With her gone, she had no leverage and the label’s acquisition value had peaked.
It was practically inevitable at that point. What shocked her was the person who ended up buying the albums.
Her people should’ve been thinking through all the scenarios. Next time, they will.