OPINION - Why Taylor Swift is bigger than The Beatles (but smaller than the French economy)

 (PR Handout/Beth Garrabrant)
(PR Handout/Beth Garrabrant)

If you want to annoy an economist, try mixing up stock and flow. This is a mistake commonly made even by business journalists (though not Jonathan Prynn, of course) when attempting to describe the value of large companies.

So, for example, Apple Inc has a market capitalisation of $2.6 trillion. But it would be wrong to suggest this is equivalent to the GDP of France. Because GDP is a measure of output – that is, the goods and services produced in an economy. Apple's valuation is mighty impressive, but it is not generating that figure in revenue every year.

Having said all that, how is anyone supposed to convey the market-moving, inflation-busting, recession-proofing power that is Taylor Swift? The singer, 34, today released 1989 (Taylor's Version), a re-make of an album that remains to many (alright, to me) the apotheosis of popular music.

The reason for these re-releases is well told – Swift does not own the rights to her first six albums, which have since been sold to a private equity company.

It seems apt that the new 1989 coincides with the release of a new Beatles song. Because in terms of success, fame and sheer output, Swift is John, Paul, George and Ringo (and Brian Epstein) all rolled into one. She is, to amend a phrase, bigger than The Beatles.

This is in large part due to technological development. On a fundamental level, if you build a house, you have a house which you can either live in or sell. If you want another house, you have to build one, which costs money and takes time. With a company like Alphabet, Google's parent company, if you develop a piece of software you can duplicate and sell it essentially an infinite number of times. The amount of money you make relative to the unit cost is just off the scale.

Similarly, Swift's music is not confined to EPs, LPs and singles. As a result of streaming services, anyone with access to the internet can enjoy her work. Swift's effective market capitalisation has risen like that of US tech giants, which generate wealth in large part thanks to scaleability, recurring revenue and network effects.

Swift is a one-woman Apple Inc. Her album reveals are akin to iPhone launches. She sells an experience, a vibe and a moment people want to be a part of. The music may as well be thrown in for free.

Swift also enjoys monopoly status. Sure, other pop stars are available, but if you want to see Taylor Swift live, you kind of have to see her. Ariana Grande is great, but she's not a perfect substitute for Swift's unforgettable bridges and clever use of assonance.

Swift's success, married with the technological breakthroughs unavailable to the megastars of yesteryear, has enabled her to attain a level of fame and economic significance unmatched in music history. Nothing lasts forever. But this is getting good now.

In the comment pages, is there such a thing as a gay job? Actually, it turns out there just might be, writes Paul Flynn. Plus we've got a couple of book reviews: Tanya Gold does The Woman In Me by Britney Spears while I cover Rachel Reeves's The Women Who Made Modern Economics.

And finally, food, drink and art: what to get up to in London this weekend.

Have a good one.

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