Taylor Swift Meets Michael Porter's Five Forces | tutor2u Business
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Taylor Swift Meets Michael Porter's Five Forces

You've got to love and admire Taylor Swift. Has there been a better example of the bargaining power of suppliers than Taylor's recent, short-lived dispute with Apple over a proposed royalty-free three-month period on Apple's new music streaming service.

The story is pretty simple. Apple launches a new music streaming service - Apple Music. But wait - Taylor isn't happy.

In a beautifully argued post on social media Taylor challenges Apple over the fact they weren't planning to pay royalties to artists during Apple Music's three-month trial period.

You can just imagine what Apple Executives were thinking about Taylor when they saw her post on Tumblr: I Knew Your Were Trouble. Were they perhaps worried that there might be some Bad Blood between Apple and Taylor?

Of course there wasn't. What Taylor was simply doing was demonstrating what happens when a supplier has particularly strong bargaining power over its customer. Porter's Five Forces Model in action once again!

Apple needs Taylor more than Taylor needs Apple - which is pretty remarkable when you consider that Taylor Swift is just one recording artist and Apple is the world's most profitable company.

The problem for Apple was that they need Taylor Swift's music on Apple Music for it to have credibility. Without Taylor there would be a massive Blank Space in an important new service for Apple.

So almost immediately after Taylor's tumblr post Apple backtracked on their 3-month royalty-free period. Taylor was happy, Thousands of her recording-artist colleagues were happy. And Apple can rest easy knowing that so far as Taylor's relationship with Apple is concerned, You Belong To Me.

This excellent video below from the FT provides further background to the Taylor Swift / Apple discussion!

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