Taylor Swift, the 33-year old pop star, needs no introduction — but articles do, so here we are.
Here’s another article intro, from The Wall Street Journal:
It’s simple Taylornomics: When Taylor Swift comes to town, Swifties go on a spending spree.
Or The Washington Post:
Call it a gold rush: Taylor Swift is adding billions to the U.S. economy.
Or Bloomberg:
Taylor Swift’s Eras tour has generated as much money as the economies of small countries.
Swift is big journalistic business, clearly. So much so that Gannett, which is decimating local newspapers in the United States, was able to attract breathless coverage of its decision to hire a full-time Taylor Swift reporter.
There’s no point beating around the bush: Swift attracts a lot of attention, and news organisations, who just want your eyes and clicks, will keep writing stuff about her as long as you keep clicking. See also: Beyoncé and what she is or isn’t doing to inflation. Hi, we’re glad you’re here.
But something significant has shifted recently: Swift has moved from being a cultural story (some people like her songs, some of them like her songs a lot) and an industry story (Swift’s clout has made her a significant voice in arguments over artists’ rights over their music and streaming income), into an economic story with billion values and country-level comparisons attached.
To be sure, Swift’s making an absolute tonne of money from ticket sales. But how much? A couple of recent articles by major publications have taken a stab at calculating this, with wildly different results.
So, naturally, FT Alphaville tried to figure out who, if anyone, was right.
Before we get into it, here are three things this article will not be about:
— Swift’s income from merchandise or the Eras tour concert movie, because life is too short.
— whether Swift makes good music, because, frankly, who cares what some grouchy finance blogger in London has to say about that*.
— whether it is right, during a climate crisis, that Swift uses private jets as much as she seems to do, and if her past excuse [to paraphrase] of “actually I also let my friends use them” is credible.
— pretty much anything else that’s actually about Swift as a person.
It also won’t be about Swiftonomics as a distinct pillar of the US economy. For a good sense check on that, try this post by Jadrian Wooten from Virginia Tech. Tl;dr, yes a lot of money is being spent on tickets and merch, but Swifties would have still have spent money on food even if they’d not attended her concerts.
You did a number on me / But honestly, baby, who’s counting?
As a general principle: the bigger a number, the more that number is unpinned by assumptions. We see this all the time in macro statistics, which are typically an informed guess based on extrapolations, guesswork, adjustment and a sprinkling of vibes.
Swift’s Eras tour — currently 49 shows deep into a 146-date run — is within this mushy territory.
Here’s a graphic from The Washington Post on October 13:
Based on this figure, the paper says:
Swift’s earnings would be the most from a single tour for any musical act to date — and more than the yearly economic output of 42 countries, including Liberia, which has more than 5mn people.
Earnings here, we presume, has the typical US meaning: post-tax profits.
And here, with some cutesy, thematic but pointlessly complex dataviz, is a considerably more sober Bloomberg Wealth report less than a fortnight later:
The figure cited by WaPo excludes merchandise, so comparing like-for-like, we have to take the, err, less bright-pink beads in the top Bloomberg string and extrapolate them for the rest of the tour. The figure shown above seems to be about $175mn for ticket sales, so the estimated full figure (assuming the average venue size and ticket prices holds steady, see how much assumptions begin to matter) would be about $450mn.
Comparing hypothetical apples with hypothetical apples there’s a roughly $3.6bn gap between the estimates published by two major news outlets. That gap is bigger than the GDP of dozens of countries! 🤓
How does this happen? Let’s look at Bloomberg, the more conservative estimate, first. The Borg’s article has a methodology section, which says:
Earnings from touring were estimated using gross ticket totals as reported by Billboard Boxscore and assuming Swift received 35% of ticket revenue after production costs, stadium fees and payments to booking agents. The Eras Tour revenue was calculated based on the average ticket price according to Pollstar multiplied by the number of tickets sold for shows performed as of Oct. 11, 2023…
Swift’s earnings across all categories reflect an estimated 20-30% commission paid to personal management, such as attorneys and advisers, and assumes she paid income taxes at the highest marginal federal rate. To calculate her present value of cash from earnings, a return based on the MSCI World Index was applied for each year since 2007.
The Pollstar data appears in this report, in which the concert data platform estimated her tickets sold at an average of $253.56 each.** Bloomberg doesn’t mention a specific figure for audience sizes, so it’s hard to know which Billboard Boxscore number it is working off.
How credible is that ticket sales figure? Another estimate in the same ballpark comes from Billboard, which reported that tickets initially sold for an average of $215 (citing “concert business sources” for this number). Other estimates, as we’ll soon learn, are available.
Eras tickets initially sold for starting prices of $49 to $449, as widely reported last year, with VIP tickets priced from $199 to $899. However, Swift — who says she is “extremely protective” of her fans — was happy for Ticketmaster to use “dynamic pricing”, the system by which prices change in response to demand. As a result, some fans will have paid more — but it’s just not clear how many, and by how much.
We asked Pollstar for more details about methodology for its estimates, but they had not responded at time of pixel.
Bloomberg’s formula therefore presumably ran something like this:
=((Ticket price [$254]*Attendees [???])*146)*0.35
Onward. Rather than conduct its own calculations, WaPo has apparently outsourced its Big Number to reporting by “Peter Cohan, an associate professor of management at Babson College”. It says the $4.1bn tag is:
…assuming the pop star ends up keeping the standard artist’s share of roughly 85 per cent of her tour’s revenue, with average ticket prices of $456.
Which begins to show why its estimate is roughly a Suriname out from Bloomberg’s. Tickets have of course subsequently reached incredible resale prices, but that’s (financially) irrelevant to Swift, who doesn’t get that money.
WaPo’s figures come from an article Cohan wrote for Inc, an American business magazine. The piece appears to have been Cohan’s third outing into Swiftistics (part one and part two here, both on Forbes).
His initial estimate, published last December, was based on Swift taking 105 per cent of ticket sales (bullish, but not unheard of), and concluded she could make, after taxes and costs of 20–25 per cent, between $465mn and $496mn including merchandise across the (then) 52-date tour, based on Billboard’s $215 estimate and Pollstar’s estimate that just under 54,000 people would attend each of her shows.
In April, Cohan increased his estimate by a casual billion or so. Why the huge leap? Uh:
Billboard’s estimate assumed an average “Eras” ticket price of $215. However, it could be higher which would make “Eras” the biggest grossing concert tour ever. Armen Shaomian, associate professor of entertainment management at University of South Carolina, told me April 4 that the average ticket cost could be close to “$700 or more depending on the location of the show.”
If the average ticket price was $700 instead of $215, “Eras” ticket sales would pop to $1.9 billion — making “Eras” the top grossing tour ever with much higher average ticket prices and far fewer concerts…
Based on the assumptions I used above, a $700 average ticket price from the “Eras” tour would add a whopping $1.5 billion to Swift’s “Eras” take.
Well, sure. And, as Gino D’Acampo once said: “If my grandmother had wheels, she would have been a bike.”
This process of seemingly exponential Swift earnings growth continued apace into Cohan’s October article for Inc. From that article:
By 2024 when the Eras Tour will end, Swift’s ticket revenue could reach $4.8 billion. Since April, here’s what changed:
— The number of concerts increased from 52 to 146
— My estimate of the number of fans per concert rose from 52,000 to 72,459 based on CNN’s report
— My estimate of the average ticket price fell from $700 to $456, from CNN
…
Assuming she pays tour expenses of 20 percent, Swift would net a whopping $4.1 billion (80 percent of the $5.1 billion).
These numbers are more worthy of attention.
It’s just a question
The updated figures that prompted Cohan to add a punchline-sized national economy’s worth of earnings to his estimate are based on data from a survey company called QuestionPro.
CNN’s write-up of the findings, which opens…
Taylor Swift’s era-defining “Eras” tour is flying like a jet stream, high above the music scene — by billions of dollars.
…also says all the following things:
The average price of presale and first sale tickets was $455.78, and Swift has 68 shows total in North America. The survey did not take into account whether respondents bought one ticket or multiple tickets.
The average attendance per show was 72,459, accounting for closed off areas and floor seats, according to QuestionPro data.
Concertgoers participating in a QuestionPro poll of 862 people who say they attended at least one “Eras” concert said they spent an average of $291.62 each on their outfits, $214.80 on merchandise and $131.48 for food and drinks.
The average resale price of an “Eras” ticket was $1,607, SeatGeek told CNN. That’s up 741% from her “Reputation” tour in 2018, during which the average resale ticket price was $191.
Hell was the journey for Swifties who sought tickets, though it brought those who secured them heaven.
QuestionPro’s write-up is here. Alphaville got in contact, and they were kind enough to share the full report and discuss their methodology/process.
The group conducted two studies — one in May, with 592 “double verified” respondents, and another in August with 862 respondents who were “were carefully selected from a geographically representative panel of double opt-in members, ensuring data reliability and diversity”. QuestionPro claims a 4 per cent margin of error for the first survey, and 3.3 per cent for the latter.
Here are their summary figures:
So, much higher ticket prices than Pollstar or Billboard suggested (more on those shortly). The average attendance figures there are also striking. Pollstar’s estimate of 54,000 is quite a bit less than 72,459, and therefore produces very different numbers once it’s fed into the sausage-making machine.
Regrettably, this disparity forced us to do journalism, so we read all the local media reports following Swift’s US appearances up to the end of August, put the reported attendance numbers into a spreadsheet, put those numbers into a chart, and then put that chart here:
Based on those reported numbers, the average attendance was 66,812 across the first 46 Eras tours. We have no way of knowing what the future numbers will be.
A couple of other observations/learning regarding this data:
— our numbers have the advantage of hindsight.
— some of these figures were cited directly to the venue, others weren’t but presumably did come from the venue, rather than, say, the reviewer’s skills as a quantity surveyor.
— in several instances, Swift set attendance records that Ed Sheeran subsequently broke. Should we instead have written about Sheeranomics? It’s a bit too much, too late, if we’re honest.
— Metallica was able to have 8,000 more fans than T-Swift at its two SoFi Stadium shows in Los Angeles because of something called the “Snake Pit”. We daren‘t ask.
Anyway, QuestionPro did some extrapolation from their figures and landed on an expected overall economic impact of about $6bn for the tour as a whole:
Drawing from our current insights, it is estimated that The Eras Tour will contribute a substantial Total Average Consumer Spending of $6 billion to the North American economy over the course of its tour duration. This assessment assumes that the spending trends observed during the period of May to August 2023 remain consistent throughout the entirety of the tour…
“These numbers are pretty incredible,” said Dan Fleetwood, President of QuestionPro Research and Insights. “If Taylor Swift were an economy, she’d be bigger than 50 countries; if she was a corporation, her Net Promoter Score would make her the fourth most admired brand, and her loyalty numbers mimic those of subjects to a royal crown. It’s all a testament to her focus on the fan experience.”
We reckon their attendance figures are a mild overshoot, but more accurate than Pollstar’s. But what about the claimed ticket prices, which are roughly double the other figures we’ve seen?
Cohan cited a figure of $456 (“average price of presale and first sale tickets”) from CNN’s report, which no longer appears in the QuestionPro numbers. From Cohan’s calculations, that headed directly on to the pages of The Washington Post†.
Some more weirdness occurred here though. WaPo said:
That’s assuming the pop star ends up keeping the standard artist’s share of roughly 85 percent of her tour’s revenue, with average ticket prices of $456.
Cohan said “I assumed her promoter will pay her 105 percent”, then deducted about a fifth of this for her costs and taxes, reaching an 85 per cent profit estimate that way. WaPo decided, confusingly, to call her share 85 per cent. Whatever. Clearly, Bloomberg thought about this very differently, and landed on 35 per cent of ticket sales after expenses and tax. Which is another big gap.
QuestionPro’s final findings are a bit more nuanced. Their May survey found that respondents had spent an average of $420.17 on tickets, and their August survey found a slightly lower average of $396.29. The crude average of the two is $408.23. Here’s their breakdown of when the tickets were purchased:
Notably, resale purchases represent a small fraction of all the purchases, suggesting that — unless resale prices were totally egregious (which can’t be ruled out) — they shouldn’t have shifted the average too much. Maybe dynamic pricing really did make it a cruel summer for Swifties? Either way, it suggests that the Cohan/WaPo number is probably overly generous.
We’re left with three different attendance figures, two very different estimates of what proportion of ticket sales Swift would have bagged, and four estimates of ticket prices. None of these, as far as we can tell, can account for the unknowability of future show attendances or prices.
What’s a finance blog gonna do? An article’s gotta shine. Since we’re all friends here, let’s stop talking about the sausage machine and actually make one.
This is basically an opportunity for you, dear reader, to get to be a journalist! Don’t let the power go to your head.
We hope that was fun. So: between $593mn and $4.1bn of ticket profits, depending on whose numbers you choose to believe.
Closing observations:
— The lowest possible combo (Billboard/Pollstar/Bloomberg) is a notch larger than the $450mn we extrapolated from Bloomberg’s dataviz above, but not too far off.
— More than anything else, assumptions about how much Swift is taking home as a percentage shift the overall total.
— Data journalism is hard.
Further reading
— Why I believe in Taylor Swift (FT)
— How to leave a cult (with pictures) (WikiHow)
*Full disclosure: the author tried listening to 1989 (Taylor’s Version) while writing this but the lyrics were way too clear.
**Swift is responsible for truly some horrible usage of words, many of them by other people. But this Pollstar intro takes the bracelet:
Taylor Swift’s “Eras” tour is so capacious, it struggles to be constrained within a single metaphor.
She is a hyperluminous star, pulling in all manner of matter and casting a bright light on all of it.
This issue tells tales of a year of blockbusters and no one has busted more blocks than Swift.
†Also the “first news publisher to partner with the Panera Bread Unlimited Sip Club”
Read the full article here