More than half a year ago, in my leadership seminars, participants would laugh and love the session, while others wondered why I presented Taylor Swift as a case study on entrepreneurial leadership. Then, business articles began articulating the same perspective.
I have combined two writers’ takes on Taylor Swift. One is from Peter Cohan, and the other is from novelist and author Michael Grothaus. I then took the liberty of adding a few personal observations.
Taylor Swift embarked on her Eras tour with ambitious financial expectations. Initially, the tour was estimated to yield between $500 million and $1.5 billion in profits. However, the tour’s staggering success surpassed these projections, potentially netting Swift a remarkable $6 billion.
There are three pivotal factors behind this incredible surge:
The power of expansion: Swift responded to increasing demand by adding 94 more tour dates, ultimately expanding the tour to 146 stadium performances. This substantial increase, representing an increase of 181 percent in the number of Eras stadium dates, significantly boosted the tour’s financial triumph.
Fans’ enthusiasm: Each concert witnessed a higher fan turnout than initially estimated, with an average of 72,459 attendees per show. Remarkably, the average ticket price of $456, while lower than the projected $700, ultimately contributed to Swift’s burgeoning net profit.
Merchandise magic: Merchandise sales at the venues proved to be a financial goldmine, far exceeding initial forecasts. Fans, eager to connect with Swift’s brand, spent an average of $214.80 on concert merchandise, doubling the original estimate of $80 per fan.
In addition to the concert revenues, Swift’s concert movie, Taylor Swift: The Eras Tour, is anticipated to generate an extra $100 million.
Swift’s remarkable journey from a budding artist in Nashville to a global superstar holds invaluable lessons for business leaders navigating today’s dynamic and unpredictable markets:
Create a stellar product: Swift’s extraordinary success begins with her talent as a singer and songwriter. Her ability to craft diverse musical genres has endeared her to a broad and loyal fanbase. In business, products and services that resonate with customers are the foundation of success.
Adopt a customer-centric approach: Swift’s deep understanding of her fans and her knack for engaging with them are essential aspects of her appeal. Building strong customer relationships, intuiting their needs and effectively communicating with them are pivotal for business success.
Embrace your story: Swift’s ascent in the music industry is a testament to her compelling story and unwavering determination. In the entrepreneurial world, a compelling narrative can captivate audiences and inspire trust.
By the tour’s conclusion in 2024, ticket revenues alone could reach $4.8 billion. The concert promoter is expected to pay Swift 105 percent of the ticket sales, approximately $5.1 billion. This arrangement reflects the absence of risk for the promoter, a sentiment shared by industry experts like David Herlihy. Considering tour expenses, including taxes, crew, venue rentals and other logistical costs, it is estimated that Swift’s net profit from the tour will be a staggering $4.1 billion, constituting 80 percent of the total ticket sales.
Swift’s merchandise revenue, expected to reach $2.27 billion by the end of the tour, also contributes significantly to her financial triumph. Assuming she retains 80 percent of this revenue, Swift’s net merchandise earnings are projected to be $1.8 billion. Meanwhile, her concert movie, Taylor Swift: The Eras Tour, may add an impressive $113 million to her earnings, cementing her status as a financial powerhouse.
But look at her journey throughout her career:
Swift’s open letter to Apple in 2015 resulted in the tech giant altering its policies for Apple Music. Initially, Apple intended to offer three months of free service without compensating artists. Swift’s public stance compelled Apple to change its approach, ensuring artists received royalties from day one.
Swift’s principled stand against Spotify’s low artist royalties led to her removing her catalog from the platform. Swift’s eventual return to Spotify signaled to investors that the music streaming giant had addressed her concerns, positively influencing its public offering.
Elon Musk’s advice for Swift to share her music and concert videos on his X platform highlights her sway over powerful figures.
Finally, AMC Theatre’s decision to distribute Swift’s The Eras Tour film, despite potential conflicts with Hollywood studios, has proven to be a lucrative partnership.
Swift’s immense generosity in rewarding her staff, truckers and crew by giving away millions of dollars in surprise bonuses and checks has endeared her to the people who made her concerts successful. This is entrepreneurial leadership in action.
Now, she has caused political tensions within the ASEAN region, with some members accusing Singapore of not being a good neighbor because all of her concerts are held only in that country.
I can still hear Taylor Swift’s music: “Hi! It’s me. I’m the problem, it’s me.”
(Francis Kong’s Inspiring Excellence podcast is now available on Spotify, Apple, Google or other podcast streaming platforms).
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