Home » Feature » Record labels invest 33.8% of their global revenues on artists

Record labels invest 33.8% of their global revenues on artists

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In today’s dynamic global music ecosystem, the role of record labels as the leading investor in music and partner and collaborator with artists has never been more important.

Record labels invest $ 5.8 billion, or 33.8% of their revenues, on artists. It is the result of a research conducted by IFPI on its members and presented on the “Record Companies: Powering the Music Ecosystem” site.

Record labels invested US$4.1 billion in A&R and US$1.7 billion in marketing for artists and their music in 2017 for a combined total of US$5.8 billion. This equates to approximately 33.8% of global recorded music revenues invested annually into breaking, developing and supporting artists around the world.

Record labels

These figures reflect a continuation of labels commitment to artist investment. When last reported in 2015, the combined investment was US$4.5 billion (reflecting a 3.1% increase from 2015 to 2017), or 27% of revenues at that time.

“In today’s highly competitive music market, the role of the record label company has never been so important. While artists have a myriad of choices on how to develop their careers, a home record company offers a unique and unparalleled support,” comments Frances Moore, IFPI CEO.

 

Record labels

 

IFPI, the association that brings together and represents the record labels worldwide, explains that the investment takes place through the Artists and Repertoire (A&R) and Marketing departments.

“As the industry continues to grow and develop, so too does the investment from record companies not only in developing and breaking artists but in the people and infrastructure that enable this to happen all over the world,” she added.

A&R – the record industry equivalent of R&D

Recorded music is an exceptionally investment-intensive business. If A&R is considered to be the recording industry’s equivalent of other industries Research and Development (R&D) then the proportion of record company revenue invested in this area (23.9%) is higher than virtually any other industry.

Record labels provide artists with unique support

This investment of financial resources is bolstered by that of human resources teams of highly creative and driven individuals within the record companies. Together, this global network of teams (including, but not limited to, A&R and marketing) work together with artists to help turn their creative ambitions into a reality.

IFPI also launched an interactive microsite on 22nd May which focuses on the role of a record label and the specialist teams that work in partnership with artists.

 

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