A little math shows that Taylor Swift probably could have pocketed more from Eras. Entrepreneurs in it for the long haul know why she didn’t.
A friend attended three Taylor Swift Eras Tour shows. One he watched from a luxury box. Another he watched from the front row. Not sure where he and his family sat for the final show, but I know he paid a premium for all those tickets on the resale market.
In the process he–along with a total of more than 10 million people–helped Swift’s tour become the first to break the $2 billion mark for ticket sales alone, with a gross per show of nearly $14 million. Doing a little rough expenses math indicates Swift likely netted between $5 million and $6 million per show after venue, promoter, and staging costs.
That’s just ticket sales. Factor in a conservative estimate of merchandise sales, and subtract the $197 million Swift handed out in cast and crew bonuses and she likely netted between $800 million and $900 million total before taxes.
What entrepreneurs know
Or to use a technical accounting term, “a lot.”
But “a lot” could have been a lot more. According to an analysis conducted by The Economist that evaluated secondary ticket sales, Swift left an estimated $50 million on the table for each show.
How? Ticket prices in the U.S. ranged from $49 and to around $900. But that’s just face value. Resale tickets in North America sold for an average of $839. Throw in a little dynamic pricing here, a little online auction action there, and Swift could have significantly bumped up her gross ticket revenue.
Then there’s where she took the tour. Resale tickets for European tours sold for an average of $385, less than half the average U.S. resale price. More dates in the U.S. and fewer in Europe (or simply adding additional dates in the U.S.) would also have increased gross revenues, even if she didn’t take advantage of dynamic pricing or online auctions.
When you’re the boss
Add it all up, and The Economist estimated she could have made an additional $50 million per show.
A four- to five-fold revenue boost seems like a lot, though. (If only because public sentiment could have quickly turned against Swift; more on that in a moment.)
So let’s assume she could have earned an additional $10 million per show through creative ticket pricing and sales platforms, and a more bottom-line approach to tour stop destinations (think less Europe, more North America). At 149 shows, that’s just under $1.5 billion, most of it revenue that–since most of her costs are already accounted for–would nearly all be profit.
Shoot, use $5 million per show and we’re still talking an extra $750 million.
Either is a number accountants define as “a lot lot.”
Your long-term vision
That’s where it gets interesting. If Swift were a public company–her gross revenue qualifies her to be listed on the Nasdaq–she would surely feel pressure from investors to boost short-term results. Leave multiples of earnings on the touring table? That would be a hard sell.
Yet Swift did–and could–because she is the founder, CEO, and sole investor in her business.
To paraphrase Arnold Schwarzenegger, she preserves her power to say no. She can make long-term decisions. Instead of choosing to optimize pricing levels, she could choose to overdeliver on value.
Plenty of fans paid a premium for tickets on the secondary market. They made a cost-benefit decision–but if the benefit didn’t outweigh the cost, they knew the premium didn’t go to Swift. That means she stayed at arm’s length, both financially and emotionally, better preserving her relationship, however parasocial, with her fans.
Calling your own shots
Will her next tour be as successful? Maybe not. Consider pent-up demand for this one. Eras launched five years after her last tour, and over that five-year period she released four new and two re-recorded albums. Her shows were truly a spectacle: three hours, 40-plus songs, incredibly sophisticated production values, an evolving set list that made each show feel at least somewhat unique.
Topping Eras will be hard.
But here’s the thing. Two years and 140-plus shows later, resale ticket prices for her last U.S. show in Indianapolis cost over $1,200 more than for her first stop in Glendale, Arizona.
Remarkably, demand didn’t lessen. Unlike for most tours–even farewell tours–ticket demand built. (For example, while the median resale ticket price for Beyonce’s first 2023 U.S. show was $182, for the final show on the tour it was $109.)
Your values and loyal fans
It’s easy to say that it was easy for Swift to sacrifice, even at whole-number multiples, short-term gains. What’s another $1.5 billion when you’re netting $800 million?
A lot–and most people would have seized it. Seriously. If I offered you $800 million, and then said that you could actually get $2.3 billion for doing the same amount of work in the same amount of time, would you turn it down?
However you estimate additional revenues, the fact remains significantly more money was on the table–and Swift turned it down.
That’s a testament to the relationship she wants to build–and maintain–with her fans, to her long-term business savvy, and to a person who clearly wants to feel good about what she does, who she does it with, and whom she does it for.
Which sounds, to me, like a perfect definition of entrepreneur.
