Here's how much Taylor Swift's 'Tortured Poets Department' will impact her record label, according to an analyst

By Steve Goldstein

Swift is 'overrepresented' in sales of physical media that are less profitable

Taylor Swift's new album "The Tortured Poets Department" is smashing all kinds of records. But not particularly for her record label, the publicly traded Universal Music Group.

That's according to Bank of America analyst Adrien de Saint Hilaire, who, pun intended, tortured the Amsterdam-listed company's financials to tease out the T-Swift impact.

According to de Saint Hilaire, Universal Music Group in 2020 disclosed that its best-selling artist accounted for less than 1% of recorded revenue, and that the top 15 accounted for 12%.

The share of top 50 has now grown to 24% by 2023. Separate data from Luminate shows that Taylor Swift represented 1.8% of U.S. music consumption last year.

Swift also is less profitable for Universal Music than other artists since she owns her own master recordings and is entitled to a larger royalty share. Plus, she is overrepresented in physical formats which are lower margin. In 2022, for instance, Midnights represented 0.2% of overall U.S. stream volumes but 1.8% of all physical sales.

Put it all together and it doesn't seem like much. De Saint Hilaire estimates Universal Music Group may now see physical sales in the second quarter outperform current market expectations for a 2% decline. And the impact on profit and loss will be "minimal."

This, De Saint Hilaire says, isn't a bad thing. "We see it as a strength of the UMG story: it is increasingly less hit driven and more of a recurring annuity, which justifies a rerating," he says, with a EUR32 price target.

Universal Music Group (NL:UMG) shares rose 1% to EUR27.22 and have gained 5% this year.

-Steve Goldstein

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04-23-24 0801ET

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