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IFPI report hones in on labels’ investment in music
By Chris Cooke | Published on Tuesday 25 November 2014
Ah, record companies, remember them? Investing in new artists; helping acts hone their musical style; partnering the best musicians, songwriters and production talent; devising and delivering imaginative marketing campaigns; and then ensuring an artist’s output was seen and heard as widely as humanly possible. Cunts.
So thank the Lord that in this direct-to-fan, social media, streamify age we’ve been able to get rid of those money-grabbing, control-freaking, artist-screwing bastards, right?
Well, hmm, no. Because – while managers, promoters, agents and artist service providers might dispute the claim made by global label trade group the IFPI this morning that its members remain “the engine room of the global music industry” – it is fair to say that when it comes to new talent, good old fashioned record companies do still, more often than not, play a vital role, as investors, product developers, marketers and content distributors.
For its part, the IFPI reckons that labels major and indie worldwide are now investing $4.3 billion a year in artists through A&R and marketing, which accounts for 27% of their revenue, up from 26% back in 2011. And that means that, over the last five years, labels have collectively invested over $20 billion in developing and promoting artists and new music. So shut up your moaning about the labels having a few percent each of Spotify equity.
Well, the IFPI didn’t actually say that last bit. Though, while launching its annual ‘Investing In Music’ report, the trade group did claim that 7500 artists were signed to the three major labels in 2013, with tens of thousands of acts allying with the indies. And a fifth of those signings are new artists.
“Record companies invest a greater proportion of their global revenues in A&R than most other sectors do in research and development”, said the IFPI, a customary though generally accurate claim always made when these kinds of record industry stats are published. “Comparisons show music industry investment in A&R (16%) exceeding the R&D investment of industries including software and computing (9.9%) and the pharmaceutical and biology sector (14.4%)”.
Some other stats and fact nuggets in the report include: the costs of breaking a new artist are between $500,000 and $2 million when advances, content production costs, tour support and marketing are accounted for; and although it’s a global industry, in twelve of the record industry’s leading markets local repertoire accounts for more than 70% of the sales of the top ten albums. The report also cites Unsigned Guide research that shows most new bands still seek a record deal.
Oh, and all you people who say that the record industry is dead and those live music dudes drive everything now. Well, shut up you. Or, in the IFPI’s words: “Live performance has not replaced recordings as the driver of the music industry. While record companies invest $2.5 billion in A&R, there is little evidence of such substantial investment in new music coming from any other source”.
Not only that, but: “All of the five top grossing live tours of 2013 were by artists who first released albums nine or more years previously, with one group having recordings going back 50 years. Few artists can achieve a scalable, sustainable music career without producing recorded music”. So consider yourselves told.
And on the strict condition that you never again claim “it’s all about live these days”, you can each enjoy this quote from IFPI boss Frances Moore: “‘Investing In Music’ highlights the multi-billion dollar investment in artists made every year by major and independent record labels. It is estimated that the investment in A&R and marketing over the last five years has totalled more than $20 billion. That is an impressive measure of the qualities that define the music industry, and which give it its unique value”.
So, to conclude, say what you like about the labels, call them “cunts” if you want, though I wouldn’t approve of such a thing, but you can never – ever – accuse them of failing to publish an annual report telling you how important they all are. OK. As you were.
