According to a new report released by the International Federation of the Phonographic Industry, or IFPI, and in association with the World Independent Network, or WIN, music labels invested more than $4.5 billion in both artists and repertoire, or A&R, and marketing in 2015.
The report, titled Investing in Music, shows that major music labels are still the primary investors of music. The report highlights “the extensive ‘behind the scenes’ work performed by teams of professionals at record companies supporting these efforts.”
– Record companies invest 27% of revenue back into A&R and marketing. This works to discover, nurture, produce, and finally, promote artists. Investment totaled $4.5 billion in 2015.
– Of the 27% investment, record companies invest 16.5% of revenues into A&R. According to the report, this is a higher investment ratio of all the leading sectors of the EU Industrial R&D Investment Scoreboard in 2015.
– It typically costs $500,000 to $2 million to break in a major market. This includes investments like artist advances, recording costs, videos, tour support, marketing and promotion, and more.
Read the full report here