Taylor Swift’s Concerts Have Grossed More Than Half a Billion Dollars in the Past Three Years – But Not Without Risk

Taylor Swift might have been snubbed by the Grammys, but that doesn’t mean 2018 didn’t belong to her.

Swift and her latest album, Reputation, were overlooked in every major category in the annual awards nominations that emerged last week. Yet just seven days beforehand, Billboard announced that Swift had broken the record for the highest-grossing U.S. tour in history, even beating the Rolling Stones’ 2005-2007 A Bigger Bang run, which grossed a hardly inconsequential $245 million.

Swift’s Reputation run saw her play 38 stadium shows across the States between May and October, generating $266.1 million via 2,068,399 ticket sales — an average per ticket spend of $128.65. Following this system of calculation across Swift’s entire global Reputation tour — taking in 53 dates, finishing in Tokyo last month – suggests she will have grossed upwards of $350 million.

Add to that the $250.7 million that Swift’s 1989 tour officially generated worldwide in 2015, and her live efforts should have generated over $600 million in ticket sales during the past three years alone. As such, Swift offers us a very interesting case study regarding where the real superstar money is being made in the modern music business. But before we get there, it’s worth noting a couple of reasons why she was able to make history with her Reputation shows.

Swift and her live team (including promoter AEG and ticket partner Ticketmaster) had some nifty tricks up their sleeve over the past year – and they showed themselves willing to take some major risks. Team Taylor deployed an unusual model of so-called “slow ticketing” to ensure that as much money as possible was paid by fans for a “primary” ticket, rather than paid to scalpers re-selling those same tickets to consumers.

Whether you view “secondary ticketing” as the good ol’ free market in action, or, indeed, immoral leeches ripping off fans and artists, one thing’s for sure: ticket resale is big business. The world’s largest ticket scalping platform, eBay’s StubHub, turned over more than a billion dollars in net revenues last year.

Team Taylor knew this practice was siphoning off major value from their own ticket sales: on the 1989 tour’s US run, which grossed $181.5 million, Ticketmaster estimates that a full 30% of tickets were resold for profit on the secondary market.

To counter this on the 2018 Reputation tour, Swift deployed a one-two combination.

First, fans were required to to be “verified” before they were permitted to purchase a ticket, helping to block automated bots from buying up hordes of seats which could then be resold by scalpers. And, second, Swift essentially tested the upper boundaries of what fans would pay for the best seats in the house. Her logic: if a scalper has to pay $128.65 for an average ticket to these shows in the first place, what chance does it leave them of making a profit on the second-hand market? And, therefore, what are the chances they’re not going to take the risk?

By testing her fans’ loyalty (and their moms’ credit cards) with her best tickets, Swift played with the economic balance between supply (i.e. of tickets) and demand (i.e. of people willing to pay $100-plus for them). The move, fortified by ”dynamic pricing”, won her plenty of criticism. Not only did it mean fans couldn’t get a VIP view for an economy pricetag, it meant that, unlike the traditional live sales model (high demand, very limited supply) her Reputation tickets didn’t sell out in a hurry. (“Slow ticketing,” geddit?)

Michael Rapino, CEO of Live Nation – the world’s largest concert promoter and owner of Ticketmaster – has previously explained to me that much of this comes down to an individual artist’s brand. Bruce ‘man of the people’ Springsteen consistently risks heavy activity on the secondary market by keeping his ‘primary’ ticket prices affordable across the house; Taylor Swift, instead, chose to charge $800 – $1,500 for top-drawer/VIP tickets to her Reputation shows.

Swift’s “slow ticketing” strategy was a cynical headline writer’s dream. Surely the pick of the bunch, with hindsight, came from Forbes: “Taylor Swift is no longer relatable, and her ticket sales prove it.” In the end, that was rendered a foolish statement.

Swift ended up selling out her US Reputation stadium run, and grossed, on average, $7 million per show. That was more than double her US per-concert average during the 1989 tour, which grossed $181.5m domestically across 56 dates.

More importantly, the percentage of Taylor Swift tickets being resold on the secondary market was decimated by the “slow ticketing” model – down from 30% on the 1989 tour to just 3% on the Reputation tour.

With these numbers in mind, it is interesting to contrast the fortunes of Swift’s live shows with those of her recorded music projects.

According to data published by Hits Daily Double, Swift’s most recent album – 2017’s Grammy-snubbed Reputation – has sold 8.5 million “equivalent” copies worldwide to date. (“Equivalent” here is based on revenue, covering a mix of Reputation‘s traditional sales alongside the streaming performance of its tracks.) This suggests that, compared to 1989 – whose to-date global sales are nearly three times bigger – Reputation has been something of a relative commercial disappointment.

Using the rough rule of thumb that each of those 8.5 million “sales” will have grossed somewhere between $10 and $13 (broadly the standard retail price of an album in the US), it’s a fair approximation that Reputation has generated around $100 million globally to date. (This number, by the way, roughly stacks up if all of these “sales” were actually streams, converted into “albums” via standard industry metrics — based on a typical recorded music payout of $0.005 per play from Spotify.)

We can be confident in saying, then, that ticket sales for Taylor Swift’s global Reputation tour will have grossed around three to four times the amount of money the Reputation album (and its standout tracks) generated at retailers/streaming services.

Calculating Swift’s own share of the $350 million-odd grossed by the Reputation tour is an even less exact science, but there are some handy rules of thumb to help. A superstar act could – after taxes, promoter fees, manager commission, fixed costs and staging/crew costs are taken into account – expect to receive a cut of a $350 million tour gross of around 30%-35%. (You can read a good explainer on the math for that through here.)

In Swift’s case, this would have likely taken the form of a “guarantee” paid by her promoter, worth comfortably in excess of $100 million, on condition of her fulfilling her 2018 touring commitments. Not bad for 53 nights’ work.

The big news in the music industry this past couple of months has been Taylor Swift’s new record deal with Universal Music Group. Yet it appears that the realm where her fans are most strongly showing their loyalty – and laying down their cash – is when it comes to her live performances. On the stage, it seems, even more than in the studio, Swift’s Reputation truly does precede her.

Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis and jobs since 2015. He writes a weekly column for “Rolling Stone.”