It’s has becoming knowledge that in the digital age music companies are no longer investing into artist development. This may be a false claim as IFPI just released some fact that suggest differently.
According to Investing in Music report that was released on Nov 24th record companies’ annual spending on A&R and marketing now tops $4.3 billion and totals more than $20 billion over the past five years.
Some of the case studies for this project included some of the top stars of our current time. They include Lorde, Ed Sheeran, MKTO, Pharrell Williams and 5 Seconds of Summer. Record companies are still the go to investor into artist. Last year record companies invested 27 percent of their revenue in A&R and marketing, up from 26 percent in 2011.
The breakdown to break an artist in a major market is between $500,000 and $2 million, IFPI states. A typical breakdown of costs is an advance of between $50,000 and $350,000. Recording spending averages between $150,000 and $500,000, with video production costing anything from $50,000 to $300,000. Tour support can drain the budget of an additional $50,000 to $150,000, while marketing and promotional costs are between $200,000 and $700,000.
Check out Billboard.com for the full article.