It may have been a late night for the “Swifties” in your life…
Music superstar Taylor Swift’s newest album, The Life of a Showgirl, was released at midnight.
And her fans were out in force, whether refreshing Spotify (SPOT), lining up at Target (TGT), or simply waiting anxiously for their pre-ordered vinyl to arrive from Swift’s record label, Universal Music (“UMG”).
Swift revealed the album’s cover and key details in August during a splashy debut on the New Heights podcast, distributed by Amazon (AMZN)… And she’s since teased her millions of superfans for weeks with hints about the new music.
Her fans have responded. According to a recent survey from BambooHR, 6% of all salaried workers in the U.S. are taking the day off because of the new album… or roughly 3 million folks across the country.
No other artist in America comes close to Swift’s current cultural dominance. And investors should pay attention, too… especially to one catalyst for her record label, hiding in plain sight.
The Record-Breaking ‘Swift Effect’
Swift’s recent Eras Tour was the highest‑grossing tour in history with an estimated $2.2 billion in ticket sales across 149 shows. Her tour broke the billion‑dollar barrier in 2023 and kept compounding into 2024.
The numbers are staggering by any touring standard… with Coldplay’s second-place finish coming in at roughly half the revenue of the Eras Tour.
Swift has dominated screens, too. Taylor Swift: The Eras Tour became the highest‑grossing musical or documentary release ever, with a global box office of more than $260 million.
And of course, her music has dominated plays on streaming services…
The newest album crashed Spotify servers last night due to the surge of traffic. And more than 5 million fans pre-saved the album on the service, breaking the record she set with her prior album.
All in, global recorded music revenue grew 10% in 2023 to $28.6 billion… and another 5% in 2024 to cross the $30 billion mark. Swift surpassed 110 billion total streams on Spotify alone, helping make her the most listened-to artist in the world.
Why Universal Could Soon Be Listed in the U.S.
So how can investors get exposure to Taylor Swift in their portfolio?
Universal is the largest music company in the world and the parent company of Swift’s record label.
UMG runs a portfolio of labels across genres and geographies – including Republic Records, Swift’s label… as well as Interscope Records, Capitol Music, Def Jam Recordings, Motown Records, and more. It also operates a global publishing arm and a massive merchandise engine. That means UMG earns from records, from songs, from tour shirts, and even from sync deals in film and TV.
Swift is a major driver. As the company noted in its latest full-year earnings release:
Top sellers for the year included multiple albums from Taylor Swift, and albums from Billie Eilish, Sabrina Carpenter, Morgan Wallen and Chappell Roan. Top sellers in the prior year included multiple albums from Taylor Swift, and albums from Morgan Wallen, King & Prince, Karol G, and The Weeknd.
For full-year 2024, the company’s recorded music revenues came in at roughly 8.9 billion euros, up 5% from the prior year. And in the second quarter – when Swift released her Tortured Poets Department album – UMG saw a nearly 9% jump in revenues. As MarketWatch reported in August:
Swift’s last album, “The Tortured Poets Department,” accounted for over 6% of all album sales last year, according to Luminate, a music industry data tracker. In all, the album sold 3.491 million physical and digital copies in 2024, more than seven times the sales of the next-best-selling artist (emphasis added).
And soon, UMG should be coming to an American stock exchange…
Why Universal Could Soon Be Listed in the U.S.
This summer, UMG filed for a U.S. public offering – including at least $500 million worth of stock owned by Bill Ackman’s hedge fund Pershing Square.
Stansberry Research analyst Whitney Tilson noted a while back that Universal Music was Ackman’s favorite stock for the next 10 years.
And Ackman has been angling to get UMG listed in the U.S. for months now, in addition to its stock-exchange listings in Amsterdam and London. As Ackman tweeted last year:
Pershing Square has a contractual right to cause UMG to be listed in the US. We will exercise this right and achieve a US listing for UMG no later than some time next year.
UMG trades at a large discount to its intrinsic value with limited liquidity in significant part due to it not having its primary listing on the @NYSE or @NasdaqExchange and not being eligible for S&P 500 and other index inclusion.
We are going to fix this.
Universal Music has been quiet about its listing plans since the summer. But more news here, along with the successful launch of Life of a Showgirl, could be a major catalyst for UMG investors…
An AI Licensing Deal Wildcard for Universal
The Financial Times just broke news that Universal was within weeks of striking licensing deals with Alphabet (GOOGL), Spotify, and a number of AI startups. As Reuters noted:
The growing use of generative AI in creative industries has triggered a wave of lawsuits, with artists, authors and rights holders accusing AI firms of using copyrighted material without consent or compensation to train their models…
The music companies are seeking a payment structure similar to that for streaming, whereby playing a song triggers a micropayment, the report added.
Bloomberg reported on the potential deals over the summer, with the note that Universal was also pushing for equity in two generative AI startups. As Bloomberg noted:
Udio and Suno enable aspiring music creators to type in a prompt that describes a sound or song like “a modern country ballad about unrequited love” and receive an audio recording in return. The companies must train their software on datasets made up of millions of individual pieces of information. That means a lot of music.
The major music companies sued Udio and Suno last year accusing them of copyright infringement. The Recording Industry Association of America, a trade group for record labels, sought as much as $150,000 per work infringed, which could total billions of dollars.
It’s too soon to know exactly what these deals might mean for investors.
But consider how the deals that the music industry made with Spotify turned out…
Not only are SPOT shares up more than 300% since it went public in 2018, but music industry sales across the board have grown every year for the past decade. And streaming revenues have grown 10-fold… growing from about $2 billion in 2014 to more than $20 billion last year.
How Investors Can Use Whitney’s New Engine of Wealth AI System
If Bill Ackman gets his way, UMG shares will be listed in the U.S. by year-end.
That could be an opportunity… especially given the cultural force that is Taylor Swift, likely CNBC appearances from Bill Ackman detailing why UMG is a buy, and the potential for a wildcard AI licensing deal.
And for investors interested in more direct AI investing, there’s an even more compelling opportunity today.
You see, despite being college buddies with Ackman, Stansberry Research analyst Whitney Tilson admits that today, none of his connections matter anymore. As he puts it…
I have good friends at almost every major financial institution you can think of.
People like billionaire hedge-fund manager Bill Ackman (who was a groomsman in my wedding party)… or David Einhorn, Seth Klarman, and Joel Greenblatt…
And I can tell you with certainty that very soon everyone in America is going to have to make a choice.
You can either choose to get AI to work for you…
Or you can resign yourself to it working against you.
That’s it. There’s no middle ground. Doing nothing isn’t an option anymore.
Whitney details how and why AI can now make you money more effectively than whole teams of Wall Street experts in his latest documentary, The N.E.W. System.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source stansberryresearch.com ’
