What Taylor Swift’s New Record Deal Means For YouTube Musicians

YouTube has become the gateway to music stardom for many artists, from Justin Bieber to Shawn Mendes. Therefore, it’s important for YouTube musicians to understand what’s going on in the music industry.

Last week, Taylor Swift announced that she signed a new record deal with Republic Records and Universal Music Group. According to the announcement she shared on Instagram, Taylor chose UMG because they shared her belief that streaming thrives when artists, writers, and producers are compensated fairly.


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My new home 🎶

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As a smaller musician, you may remember the open letter Taylor shared with Apple Music a few years ago. She uses her giant platform to advocate for everyone involved in the creation of a song.

As part of Taylor Swift’s new deal with UMG, the label agreed that any sale of its Spotify shares will result in a distribution of money to their artists.

Taylor called this move “a sign that we are headed towards positive change for creators.” However, many musicians have been left wondering what Taylor’s new record deal means for smaller artists such as themselves.

Signed artist can start earning money apart from their advances.

In her new deal, Taylor specified that, if UMG sells part of its Spotify shares, then the label’s artists will be given their share of the profits unrecouped. When an artist is signed to a label like UMG, he or she is given an advance, which is what the label estimates that artists will earn in a year or so. Until the artist earns that same amount back for the label, they won’t earn any royalties from their music. The balance left to pay back is called the unrecouped balance.

According to Vox, with Taylor’s new deal, money earned through selling Spotify shares won’t be counted towards an artist’s unrecouped balance. Therefore, UGM artists will be given their share directly. This is similar to how Sony does business, so Taylor and UGM are hoping that other major labels will follow suit.

Smaller artists should use Swift’s deal as leverage when negotiating recording contracts.

Whenever you’re negotiating a recording contract of your own, use language similar to Taylor Swift’s announcement. Ask the label executives about their approach to Spotify shares and unrecouped balances. If the label wants to apply the sale of Spotify shares or money earned through your streaming distribution towards your unrecouped balance, you may want to take a step back.

Do your research. Talk to other artists who’ve already signed with the label and ask if they feel they’ve been compensated fairly. Don’t stop with artists, though. Have similar conversations with writers, producers, and studio musicians. Their livelihoods may depend on how your label handles unrecouped balances as well.

When your YouTube music channel starts attracting potential record deals, make sure you understand the industry jargon. Artists like Taylor Swift who are advocating for smaller musicians can help you understand what you should be looking for in a record deal.

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Kristen Harris enjoys listening to a wide range of music, from Taylor Swift to, on occasion, Celtic instrumental. She also spends her time writing, reading, and baking.