IFPI: Labels spend $4.3 billion annually breaking and marketing artists

It costs between $500,000 and $2 million to break an artist in a major market, according to Investing in Music, a report published today by IFPI, the trade body representing the global recording industry, in association with WIN, representing independent labels internationally.

The report, which is being launched at a Friends of Music event for the European Parliament’s MEPs in Strasbourg, breaks down the costs as follows.

On average, there is payment of an advance $50,000-$350,000, plus recording costs at $150,000-$500,000, followed by $50,000-$300,000 for video production. Additionally, there will be tour support at $50,000-$150,000 as well as marketing and promotional costs ($200,000-$700,000).

Of the report’s findings, Frances Moore, IFPI’s CEO, says: “That is an impressive measure of the qualities that define the music industry, and which give it its unique value.”

The detailed insightful figures confirm record companies are the main investors in the global music industry, committing $4.3 billion annually to artists and repertoire (A&R) and marketing.

As the primary investors in artists, labels spent 27% of their revenue on A&R and marketing in 2013, up from 26% in 2011.

In all, during the past five years, it is estimated that record companies globally have invested more than $20 billion in A&R and marketing.

Additionally, 7,500-plus artists were signed to major labels’ rosters in 2013, with tens of thousands more on independent labels. Furthermore, one in five artists on labels’ rosters is a new signing, “highlighting the role of fresh talent as the lifeblood of the industry”, the report adds.

“Most artists who want to make a career from their music still seek a recording deal. They want to be introduced to the best producers, sound engineers and session musicians in the business. They need financial support and professional help to develop marketing and promotional campaigns,” explains Alison Wenham, chair of WIN.

The report features data from record companies and case studies from around the world.

[Juliana Koranteng]