Features
$20 Billion On A&R
Record companies in the last five years have invested more than $20 billion in A&R and marketing, according to the International Federation of Phonographic Industry’s “Investing In Music” report.
Over the last two years the spend has been the equivalent of 27 percent of industry revenues. The report was unveiled at a “Friends of Music” evening for MEPs in Strasbourg Nov. 24, hosted by IFPI chairman Plácido Domingo.
The report also shows that in 2013 more than 7,500 artists were signed to major label deals, with tens of thousands more on independent labels.
Record companies invest a greater proportion of their global revenues in A&R than most other sectors do in research and development.
The cost of breaking an artist in a major market can vary between $500,000 and $2 million.
The cost typically breaks down as payment of an advance ($50,000-$350,000), recording costs ($150,000-$500,000), video production costs ($50,000-300,000), tour support ($50,000-$150,000) and marketing and promotional costs ($200,000-$700,000).
The report features data from record companies and case studies from around the world, including studies on Ed Sheeran, 5 Seconds of Summer, Lorde, and Pharrell Williams.