In 2021, legendary artist Taylor Swift re-recorded and re-released several of her past Grammy Award-winning albums, causing Swift fans and pop culture reporters alike to lose their collective minds. After attempts to obtain the rights to her original masters from her former record label, Big Machine Records, proved unsuccessful, Swift recorded virtually identical copies of the albums she had previously released with Big Machine and then released those new recordings on all streaming platforms. These new versions were an instant success, breaking streaming records while simultaneously diminishing the value of the original masters—raising concerns among labels that other artists may follow suit.[i]

How could Swift do this? To re-record her earlier albums, Swift had to navigate both copyright law and her contractual obligations to her old label. And, beyond the legality of Swift’s re-recording project, her successful releases of these “new” albums are likely to have a lasting effect on the music industry. Swift’s endeavor has prompted record labels to attempt to change the industry status quo by extending re-recording restrictions in their contracts with artists, as well as additional clauses that seek to prevent artists from releasing re-recordings with a similar sound to their original recordings even after their re-recording restrictions expire.

Music Copyright Background

In the United States, copyright protection extends to both musical compositions and sound recordings.[ii] Accordingly, every recorded song is comprised of two separate copyrightable works.[iii] The musical composition copyright includes the lyrics and the underlying music that make up a song, while the sound recording copyright includes the sound of the musical composition fixed in a recording medium, such as a digital mp3 file.[iv] The sound recording copyright is commonly referred to as the “master.”[v] Typically, either a music publisher or the songwriter owns the musical composition copyright.[vi] While it is more common for artists to own their song’s composition copyright, sound recording copyrights are almost always assigned to the artist’s record label.[vii]

Copyright law gives the owner of a copyright a bundle of exclusive rights, including the rights to reproduce, distribute, adapt, display and perform the copyrighted work.[viii] Because every recorded song uses both the sound recording and the underlying composition, playing a recording of a song should, in theory, require permission from both the composition owner and the sound recording owner.[ix] Meanwhile, covering a song uses only the composition and so should only require permission from the composition owner. But, in practice, composition copyright holders do not always control specific uses of their composition due to the existence of statutory licenses—commonly referred to as mechanical licenses— and contractual agreements with performing rights organizations (PROs). A mechanical license is a compulsory license enacted by statute that allows anyone to reproduce a composition as long as they pay the owner the statutory rate—the composition owner does not have the right to refuse such a use.[x] Additionally, most songwriters belong to a PRO that issues blanket licenses for the performance of their songs in public venues, radio stations and TV stations.[xi] The PRO then collects the fees and pays a percentage to its members.[xii] So, if someone wants to record a cover of a song or perform that song publicly, they likely won’t need to get permission first from the song’s composition copyright holder.[xiii]

How Copyright Law Applies to Taylor Swift’s Contract and Ownership

Back in 2005, Taylor Swift signed a six-album record deal with independent record label, Big Machine Records.[xiv] Under the terms of this deal, Swift retained ownership of her original compositions, but Big Machine owned the master recordings for her first six studio albums.[xv] As a result, Swift does not control the masters of any of the albums she released up to and including to her 2017 album, Reputation.[xvi] However, ownership of Swift’s masters changed hands in 2019 when Scooter Braun’s holding company, Ithaca Holdings, acquired Big Machine for $300 million.[xvii] Scooter Braun is best known for managing prominent artists, such as Justin Bieber, Ariana Grande and Kanye West.[xviii] Following this initial sale, Swift took to the popular blogging site, Tumblr, to claim she was blindsided by this deal and had pleaded for years – unsuccessfully – for a chance to own her work.[xix] Though, the veracity of Swift’s claims are disputed.[xx] An unnamed source disputed Swift’s account, alleging that Swift was given the opportunity to purchase her masters and knew Big Machine was up for sale.[xxi] In 2020, Swift’s masters were sold again; this time, to an investment firm named Shamrock Capital Advisors LLC.[xxii]

When her contract with Big Machine expired in 2018, Swift chose not to re-sign with Big Machine as she desired to own her sound recordings going forward.[xxiii] Instead, she signed a new contract with Universal Music Group’s (UMG) record label, Republic Records, and began re-recording all six studio albums released under Big Machine.[xxiv] Because Swift’s new contract with Republic gave her complete ownership of her sound recordings going forward, Swift controls the masters for both her re-recorded albums as well as any new musical content, starting with her 2019 album Lover.[xxv]

When Swift released her re-recorded albums, she added “(Taylor’s Version)” to the end of each song and album title to distinguish them from the old recordings.[xxvi] Because Swift heavily publicized her dispute over the ownership of her masters on social media, many sympathetic listeners stopped streaming the original recordings and instead began listening exclusively to Taylor’s Versions.[xxvii] The re-recording project was a success, and on November 5, 2021, RED (Taylor’s Version) broke Spotify’s record for most streams of an album by a female artist in one day.[xxviii] What’s more, Swift’s successful promotion of these new versions has dramatically decreased the value of her original recordings.[xxix] During the Big Machine Era, before her older albums and songs were re-recorded, Swift’s catalog earned roughly fifteen million dollars per year.[xxx] While it is not publicly known how much Swift’s re-recorded versions have undercut her catalogue’s value moving forward, it’s highly likely that the value of her first six albums has and will continue to decrease as listeners and third parties choose to stream and license Taylor’s Version of these albums.[xxxi] For instance, in one week in October 2021, Fearless (Taylor’s Version) was streamed nine million times, while the original album was streamed only six million times.[xxxii]

How Could Swift Legally Re-Record Her Songs?

What allowed Swift to re-record her music without running into legal issues with Shamrock Capital Advisors, the current sound recording copyright owners of her first six albums? Two key areas of the law are relevant here: copyright law and contract law—specifically, the contract between Swift and Big Machine.

First, Swift was able to re-record her songs because of mechanical licenses. Under Section 115 of the Copyright Act, “once a song has been recorded and released to the public … the copyright owner must license the song” by issuing a compulsory license to any person who wants to record the song, so long as the licensee pays a statutory license fee to the composition owner.[xxxiii] This means that anyone can record covers of a previously-released song without permission from the composition copyright holder.[xxxiv] Because a re-recording doesn’t copy, distribute or otherwise use the original sound recording, no license is needed from the original sound recording owner.[xxxv] This raises the following question: if every artist could easily re-record their songs by obtaining a mechanical license and paying the required fees, why hasn’t every artist in a dispute with their former label just re-recorded their music like Swift?

The answer? Contractual re-recording restrictions. Although Swift could re-record her previous works without violating US copyright law, her contractual obligations to Big Machine still prevented her from re-recording until November 2020, when the re-recording restriction clause in her contract with Big Machine expired.[xxxvi]

Re-Recording Clauses

Inserting a re-recording restriction clause in artists’ recording contracts is standard practice in the music industry.[xxxvii] A re-recording restriction clause states that an artist cannot “re-record any song [they] recorded during the term of a deal [and] for a certain period of time after the term.”[xxxviii] This prevents the artist from recording a version of their composition on their own that could potentially rival the original master recording owned by the record label. The typical restriction period is five years from the date of recording, or a minimum of two to five years after the end of the term of the contract, whichever is later.[xxxix] Thus, artists usually cannot re-record albums or songs which were released during the first few years of a contract immediately after the contract expires, even though it may have already been five years after the relevant song or album was recorded.[xl] While the details of Swift’s contract with Big Machine are not publicly available, it is likely that her contract contained a standard re-recording restriction preventing her from re-creating these albums until five years after each album was recorded, or two years after the end of her contract with Big Machine, as she waited to release her new version of Fearless until 2020—two years after her contract with Big Machine ended and twelve years after Fearless was first released.[xli]

How Might Swift’s Actions Affect Re-Recording Clauses Going Forward?

Perhaps because Swift’s re-recording success is still relatively recent, the other major labels, Sony Music Entertainment and Warner Music Group, have yet to make any notable changes to their re-recording clauses.[xlv] While these labels may follow UMG and increase the re-recording restriction periods or add additional restriction periods, they do have another option: adopting perpetual re-recording restrictions, which would prevent artists from re-recording their work forever.[xlvi]

Currently, perpetual re-recording restrictions are not common practice in the music industry and are unlikely to become so. Due to their extremely constraining nature, perpetual re-recording restrictions are heavily disfavored by artists. Any artist with bargaining power and competent representation would seriously resist their inclusion in a contract.[xlvii] Thus, perpetual re-recording restrictions may be more favorable to labels or music groups than merely extending the length of re-recording restriction periods would be; so, it’s more likely that other music labels will follow UMG’s approach, rather than fight experienced artists tooth and nail over such a deeply unpopular contractual provision. However, if an artist is inexperienced or not well-represented, a label might exploit those vulnerabilities by sneaking a perpetual re-recording restriction into that artist’s contract.[xlviii] Additionally, even if an artist agreed to a perpetual re-recording clause, it would likely be unenforceable in thirty-five years anyway due to the unwaivable termination of transfer rights afforded to artists under the copyright statute.[xlix] So while increasing re-recording restriction periods will likely occur, perpetual re-recording clauses will probably not become a standard practice in the music industry.

In addition to increasing re-recording restriction periods, some companies have begun including clauses that seek to prohibit an artist from releasing a recording that sounds similar to the original recording released under the label.[l] These provisions have begun appearing in artists’ contracts because, under current copyright law, a sound recording can sound exactly the same as another sound recording without infringing upon that sound recording’s copyright.[li] In fact, a common practice in the music industry is to create a “sound-alike.” A sound-alike is “a recording intended to imitate the sound of a popular record.”[lii] For example, the original master recording of “You Belong with Me” and Taylor’s Version sound virtually identical, aside from the slightly more pronounced banjo opening in Taylor’s Version of “You Belong with Me,” yet it does not infringe the original “You Belong With Me” sound recording copyright.

Essentially, these restrictive sound-alike provisions state that even after an artist’s re-recording restriction expires, the artist can only record a “wholly different arrangement of the songs.”[liii] But how distinct must the new recording sound from the original to qualify as a wholly different arrangement? Currently, this is still a matter of debate. Because none of these clauses have been litigated or challenged in court, the level of similarity required to breach such provisions has not been established.[liv]

One possible standard that could explain what qualifies as “wholly different” comes from the re-recording provision in mechanical licenses. Under Section 115 of the Copyright Act, anyone can make a re-recording of a composition that has previously been released to the public by obtaining a mechanical license.[lv] Under a mechanical license, an artist can rearrange a composition to fit a different style of music but cannot alter the melody or lyrics so much that it becomes a derivative work.[lvi] The labels could apply the standard for mechanical licenses when determining whether a song is wholly different. But, until such clauses are litigated in court, there will still be no definitive answer to what qualifies as wholly different under this standard.

The “wholly different arrangement of the song” requirement may also be considered ambiguous. When deciphering the meaning of contractual terms, the first step is to determine if the language used has more than one interpretation.[lvii] If the language could have more than one meaning, it is ambiguous and extrinsic evidence can be considered to determine its meaning.[lviii] And, the general rule is that ambiguities or unclear language are construed against the drafter, which, in this case, would likely be construed against the label as labels often draft the contracts between themselves and artists.[lix] The language “wholly different arrangement” could be ambiguous because the degree of variance needed between the new arrangement and the original recording in order for the new arrangement to qualify as wholly different is vague, especially if a contract does not specify what is allowed under the provision. This vagueness could give an artist an advantage in a suit disputing whether a new sound recording is “wholly different” from the original arrangement. Ultimately, whether a song is wholly different from another is likely to be a fact-based inquiry, which means that even if these terms are disputed in court, it is almost certain that juries will come to varying conclusions about what wholly different means.

Why Don’t Artists Try to Retain Ownership of Their Music from the Start?

 In the music industry, it is common for artists to forgo any ownership of their sound recording copyrights and give that ownership to their record label.[lx] In return, artists typically receive an advance on the “royalties from the commercialization of these rights”[lxi] and access to the record label’s industry experience, connections, distribution channels and marketing strategies.[lxii] Labels assume “the financial risk of betting on, distributing and promoting an artist’s work.”[lxiii] It can take a while for music to be profitable—and for many up-and-coming artists, it’s hard to turn down an advance.[lxiv]

Before this decade, it was difficult for an artist without a record label to release music on a wide scale and be financially successful.[lxv] However, with the popularization of streaming services, independent artists have fewer entry barriers to distributing and promoting their music.[lxvi] Additionally, artists are finding success by releasing music through non-traditional distribution platforms, such as TikTok, Instagram and YouTube.[lxvii] Thus, electing to be an independent artist, rather than signing with a record label, is becoming a more viable path for emerging musicians than it used to be.[lxviii] Still, because of the upfront money labels offer to new artists, the standard practice of assigning sound recording ownership rights to a label remains quite common.[lxix]

Why Do Artists Care About Owning Their Music?

Consistency, unsurprisingly, is an attractive quality for investors. Additionally, due in large part to the increased volume of releases on the streaming services, the recorded music business has grown exponentially within the past decade, increasing the attractiveness of music catalogs as commodities .[lxxv] In the wake of the pandemic, there has been increased desire on the part of listeners to ‘throwback’ to nostalgic favorites, a trend further amplified by the use of such music on TikTok and home fitness platforms.[lxxvi] With older music catalog listening increasing, the value of these catalogs to investors has increased as well. Artists may also want to sell their catalogs to make up for lost revenue due to COVID-19, which prevented artists from touring and thus cut off a major revenue generator for artists.[lxxvii] Artists who do not own their masters cannot exploit this money-generating opportunity.

Beyond monetary opportunities, artists may also want to own their masters in order to retain creative control over their work. Without ownership of their sound recordings or specific contractual provisions granting them approval rights, artists can end up with little creative control over how their songs are licensed or used by third parties.[lxxviii] This typically becomes an issue when artists do not want certain third parties to use their works in connection with that third parties’ organization, such as political groups with whose views the artist does not agree.

Conclusion

In sum, Taylor Swift’s ability to re-record the albums and songs she recorded while signed to Big Machine implicates both copyright and contract law. But while Swift successfully outmaneuvered her former label, her success may ultimately make it more difficult for other artists to do the same. As the music industry continues to evolve and more artists attempt to circumvent labels by re-releasing old works, it is likely that record labels will try to further limit artists’ ability to re-record.

End Notes

[i] Anna Nicolaou, Taylor’s Swift’s Battle to Shake Off the Suits, Financial Times (Nov. 11, 2021), https://www.ft.com/content/b36a0161-572f-48d0-9562-c8588499cbad.

[ii] See 17 U.S.C. § 102(a).

[iii] What Musicians Should Know About Copyright, U.S. Copyright Office, http://copyright.gov/engage/musicians/ (last visited Jan. 24, 2022).

[iv] Id.

[v] Donald S. Passman, All You Need to Know About the Music Business, 78 (10th Ed. 2019). But see, Shirley Halperin & Jeremy Helligar, The Big Payback: How Pharrell Williams Is Breaking the Chains of the Music Industry’s Troubled Past, Variety (Aug. 11, 2020, 11:00 AM), https://variety.com/2020/music/news/pharrell-williams-master-slave-industry-contracts-1234729237/ (explaining that the use of master has undertones of dominancy and enslavement that has always plagued the music industry and emphasizes the long-standing belief that Black artists “have been treated like slaves by the masters who they signed contracts with”).

[vi] Tamera H. Bennett, Will Taylor Swift Change the Re-Record Clause?, Bennett L. Off. (Dec. 22, 2021), https://www.tbennettlaw.com/createprotect/2021/12/22/will-taylor-swift-change-the-re-record-clause.

[vii] Sher Hann Chua & Payton Hoff, Ownership of Master Recordings in the Music Industry: Swift Winds of Change?, Tilleke & Gibbins (Sept. 19, 2019), https://www.tilleke.com/wp-content/uploads/2019/09/Tilleke-Ownership-of-Master-Recordings-in-the-Music-Industry.pdf.

[viii] 17 U.S.C. § 106.

[ix] Richard Stim, When You Need Permission to Sample Others' Music, NOLO, https://www.nolo.com/legal-encyclopedia/permission-sampled-music-sample-clearance-30165.html (last visited on Feb. 24, 2022).

[x] Peter Smith, What Is a Mechanical License?, Legalzoom (July 12, 2021), https://www.legalzoom.com/articles/what-is-a-mechanical-license.

[xi] Passman supra note 5, at 225-26.

[xii] Id. at 226.

[xiii] See id., at 215-16.

[xiv] Rhea Rao, Explained: Why Taylor Swift Is Re-Recording Her Studio Albums, and What It Is Says About Copyright Battles with Mega Music Labels, Firstpost (Nov. 16, 2021, 8:33 AM), https://www.firstpost.com/entertainment/explained-why-taylor-swift-is-re-recording-her-studio-albums-and-what-it-says-about-copyright-battles-with-mega-music-labels-10138211.html.

[xv] Kyle Kim, We Compared ‘Taylor’s Version’ Songs with the Original Taylor Swift Albums, The Wall St. J. (Nov. 12, 2021, 10:49 AM), https://www.wsj.com/articles/we-compared-taylors-version-songs-with-the-original-taylor-swift-albums-11636383601.

[xvi] See id.

[xvii] Constance Grady, The Taylor Swift/Scooter Braun Controversy Explained, Vox (July 1, 2019, 7:50 PM), https://www.vox.com/culture/2019/7/1/20677241/taylor-swift-scooter-braun-controversy-explained.

[xviii] Angelica Acevedo, Talent Manager Scooter Braun Is in a Very Public Feud with Taylor Swift. Here Are 29 of His Biggest Clients, Insider (July 2, 2019, 2:38 PM), https://www.insider.com/list-of-artists-that-scooter-braun-manages-2019-7#braun-is-justin-biebers-longtime-manager-1.

[xix] Francesca Bacardi, Taylor Swift Had Months to Buy Back Her Masters But ‘Decided to Walk Away,’ Page Six (Jul. 2, 2019, 2:16 PM), https://pagesix.com/2019/07/02/taylor-swift-had-months-to-buy-back-her-masters-and-decided-to-walk-away/.

[xx] Id.

[xxi] Id.

[xxii] Kim, supra note 15.

[xxiii] Joe Coscarelli, Taylor Swift Announces New Record Deal with Universal Music, N.Y. Times (Nov. 19, 2018), https://www.nytimes.com/2018/11/19/arts/music/taylor-swift-record-deal-universal-republic.html.

[xxiv] Dylan Smith, UMG Reportedly Modifying Artist Agreements to Prevent Taylor Swift-Style Re-Recordings, Digital Music News (Nov. 17, 2021), https://www.digitalmusicnews.com/2021/11/17/taylor-swift-umg-contracts/.

[xxv] Billboard, Billboard Explains Why Taylor Swift is Re-Recording Her First Six Albums, YouTube (Apr. 7, 2021), https://www.youtube.com/watch?v=phJQWusDOAo.

[xxvi] Carrie Battan, Taylor Swift Wins with “Fearless (Taylor’s Version),” The New Yorker (Apr. 12, 2021), https://www.newyorker.com/culture/cultural-comment/taylor-swift-wins-with-fearless-taylors-version.

[xxvii] See Raisa Bruner, Here’s Why Taylor Swift Is Re-Releasing Her Old Albums, Time (Mar. 25, 2021, 5:06 PM), https://time.com/5949979/why-taylor-swift-is-rerecording-old-albums/.

[xxviii] Bennett, supra note 6.

[xxix] Telephone Interview with William (Bill) Coiltre, Vice President & Gen. Couns. of Music Reports, Inc. (Jan. 30, 2022).

[xxx] Nicolaou, supra note 1.

[xxxi] See id.

[xxxii] Id.

[xxxiii] Passman, supra note 5, at 215 .

[xxxiv] Id.

[xxxv] Id.

[xxxvi] Kim, supra note 15.

[xxxvii] Anne Steele, As Taylor Swift Rerecorded Her ‘Red’ Album, Universal Reworked Contracts, The Wall St. J. (Nov. 12, 2021, 6:02 PM), https://www.wsj.com/articles/as-taylor-swift-rerecorded-her-red-album-universal-reworked-contracts-11636741201#:~:text=In%20its%20recent%20agreements%2C%20Universal,to%20music%20attorneys%20and%20executives.&text=Universal%2C%20which%20distributes%20Ms.,from%20all%20of%20her%20music.

[xxxviii] Passman, supra note 5, at 170.

[xxxix] Id.

[xl] Id.

[xli] See id.

[xlii] Billboard, supra note 25.

[xliii] Steele, supra note 37.

[xliv] Id.

[xlv] See Smith, supra note 24.

[xlvi] Passman, supra note 5, at 170.

[xlvii] See id.

[xlviii] Telephone Interview with William (Bill) Coiltre, supra note 29.

[xlix] See 17 U.S.C. § 203 (1976).

[l] Passman, supra note 5, at 170.

[li] Telephone Interview with William (Bill) Coiltre, supra note 29.

[lii] Id.

[liii] Passman, supra note 5, at 170.

[liv] Telephone Interview with William (Bill) Coiltre, supra note 29.

[lv] 17 U.S.C. § 115 (1976).

[lvi] Jaime Davis-Ponce, How Much Can You (Legally) Change in a Cover Song?, Sonicbids (Oct. 13, 2015, 6:00 AM), https://blog.sonicbids.com/how-much-can-you-legally-change-in-a-cover-song.

[lvii] Ki Akhbari, Ambiguous Contracts, LegalMatch (May 1, 2018), https://www.legalmatch.com/law-library/article/ambiguous-contracts.html.

[lviii] Greenfield v. Philles Records, 98 N.Y.2d 562, 569-70 (App. Div. 2002).

[lix] Restatement (Second) of Contracts § 206 (Am L. Inst. 1981).

[lx] Chua, supra note 7.

[lxi] Id.

[lxii] Roy Pq, Being an Independent Artist vs. Signing to a Record Label, Icon Collective (July 29, 2019), https://iconcollective.edu/independent-artist-vs-signed-artist/.

[lxiii] Steele, supra note 37.

[lxiv] Amanda Prahl, Taylor Swift Is Still Fighting the Battle Over Her Masters, and Here's Why It's So Important, PopSugar (Nov. 15, 2019), https://www.popsugar.com/entertainment/What-Does-Mean-Own-Your-Masters-Music-46337890.

[lxv] Steele, supra note 37.

[lxvi] Id.

[lxvii] Id.

[lxviii] Justin Grome, Independent Artists or Record Label Deal: The Entrepreneurial Differences, Forbes (Apr. 12, 2021, 7:10 AM), https://www.forbes.com/sites/forbesbusinesscouncil/2021/04/12/independent-artist-or-record-label-deal-the-entrepreneurial-differences/?sh=50415ff37eaa.

[lxix] Id.

[lxx] Good Morning America (@GMA), Twitter (Aug. 22, 2019, 5:39 AM), https://twitter.com/GMA/status/1164517518859354112.

[lxxi] Leni, What Does It Mean To Own Your Masters, Amuse (Oct. 15, 2020), https://www.amuse.io/content/owning-your-masters.

[lxxii] Id.

[lxxiii] Ben Sisario, Bruce Springsteen Sells Music Catalog in Massive Deal, The N.y. Times (Dec. 15, 2021), https://www.nytimes.com/2021/12/15/arts/music/bruce-springsteen-sells-music-catalog.html.

[lxxiv] Katina Hristova, Should I Invest in Songs and Musical IP Rights?, CEO Today (Feb. 1, 2021), https://www.ceotodaymagazine.com/2021/02/should-i-invest-in-songs-and-musical-ip-rights/.

[lxxv] Ryan Faughnder, Music Catalogs Are Fetching Huge Deals. Are They Overvalued?, Los Angeles Times, (Jan. 15, 2022, 6:00 AM), https://www.latimes.com/entertainment-arts/business/story/2022-01-15/music-catalogs-deals-bruce-springsteen-john-legend-bob-dylan-songwriters-streaming.

[lxxvi] Id.

[lxxvii] Tim Ingham & Amy X. Wang, Why Superstar Artists Are Clamoring to Sell Their Music Rights, Rolling Stones, (Jan. 15, 2021, 10:51 AM), https://www.rollingstone.com/pro/features/famous-musicians-selling-catalog-music-rights-1114580/.

[lxxviii] Mariea Watkins, Understanding the Music Synchronization License, Music Business Made Easy (Oct. 2, 2018), https://musicbusinessmadeeasy.com/understanding-the-music-synchronization-license/.

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