The Strategic Genius of Taylor Swift

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Less than two decades since making her debut recording, Taylor Swift has conquered the music industry. She has released 11 original studio albums, and the combined sales and streams of her music catalog place her among the top 10 best-selling artists of all time—a group dominated by commercial juggernauts such as Michael Jackson, Elvis, Madonna, and Frank Sinatra. Her recently concluded Eras Tour—the highest-grossing tour of all time—set off a global frenzy that sparked comparisons to the Beatles. With a net worth estimated at $1.6 billion, Swift is the most financially successful musician of her generation. And she’s managed to achieve all this during a time when the industry has undergone profound technological and business model shifts, moving from CDs to iTunes to Spotify.

Historically, musicians have found it difficult to sustain success.   At 35, Swift is already a multigenerational phenomenon: The teenage girls who bought her 2006 debut album are now bringing their own children to her shows.

Over the years Swift has displayed such a remarkable ability to innovate—and to make sophisticated strategy and marketing moves—that it’s worth trying to draw lessons from her career, the same way we study traditional business visionaries such as Steve Jobs, Richard Branson, and Jeff Bezos.  So what is the secret to Swift’s long-term success? According to the author who has written a book on Swift it can be attributed to four behaviors:

1. Targeting Untapped Markets.  Swift started out with advantages. Born into a Pennsylvania family with show-business ties—her maternal grandmother, Marjorie, was an opera singer—Swift benefited from her parents’ unwavering support. They connected her with Britney Spears’s former manager, who helped Swift secure a development deal with RCA Records at age 13. And in 2003 her parents moved the entire family near Nashville so that Swift could collaborate with top-notch writers and producers.  Instead of focusing on obstacles, Swift recognized a “blue ocean”—what the strategy gurus W. Chan Kim and Renée Mauborgne call a completely untapped market (in contrast with a bloody “red ocean,” where competitors fight over the same customers). “All the songs I heard on the radio were about marriage and kids and settling down. I just couldn’t relate to that,” Swift told the Telegraph. “I felt there was no reason why country music shouldn’t relate to someone my age if someone my age was writing it.”  Swift’s intent to target a completely new demographic has parallels to the strategy Marvel used to dominate the comic book industry.
2. Finding Opportunities to Create Stickiness.  When Swift came on the scene, in 2006, the relationship between artists and fans was undergoing significant changes. The internet was making music cheaper and easier to discover, and as social media gave fans greater access and connection, they began to expect more than just a passive listening experience. “The customers’ problem is how to navigate and ‘do things’ with the music they have access to. In other words, customer value was becoming less about getting music into fans’ hands and more about giving people new ways to engage with it. Swift did that by sharing highly personal and authentic accounts of her own experiences with her young fan base in her lyrics.  And with Swift there was the internet, which, as it has done to most things, scaled this kind of community engagement up to extreme new levels.  The more she encourages her fans to interpret her music, the more sophisticated their interpretations become. They analyze complex metaphors, track motifs across albums, and spin theories about her artistic vision. And they keep coming back for more.
   
3. Maintaining Productive Paranoia.  Swift’s last 10 original studio albums have reached number one on the Billboard 200—an unprecedented run. But Swift has rarely shown signs of complacency. In fact, she has expressed a constant fear that her success will eventually come to an end.  Swift’s self-professed anxiety aligns with a core principle of strategy. As Intel’s legendary founder, Andy Grove, famously stated, “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.”  Looking through a strategy lens, it’s apparent that at critical moments, Swift has channeled her fear into creative pivots. Often she has executed them when external signs—album sales, critical response, and award recognition—suggested that doing more of the same was optimal. Frequently she changed direction by carefully choosing a small group of collaborators to help her explore new sounds and genres.
4. Adapting to Radical Shifts in Platforms.  If Swift’s rise to superstardom was made possible by her skillful navigation of the digital age, her recent mastery of streaming has elevated her success and popularity.  In truth, she took a while to come around to streaming. Swift is considered a “class 1 superstar,” a term that the music-research firm Midia uses to describe artists whose careers started before the streaming era. This status made Swift somewhat immune to the challenges that streaming posed. Her albums received blockbuster-like attention and fanfare, so she didn’t need to come up with new, innovative ways to keep people’s attention. Because her tours are so profitable, she didn’t have to rely on streaming’s difficult economics.  But as streaming took hold, her strategy evolved. From 2015 to 2019, Spotify’s paid-subscriber base increased from 15 million to 124 million users—a growth rate of 726%. Streaming has changed content strategies: Before its rise, fans were accustomed to artists’ releasing a full-length album every few years. In a streaming-dominant world, the volume of material musicians produce matters because putting out more songs allows them to game the algorithm.