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Business News Labels & Publishers
Investment by labels and publishers enabled UK music successes, say labels and publishers
By Chris Cooke | Published on Monday 9 November 2015
Following last week’s ‘Measuring Music’ report from UK Music, the British music rights sector has been bigging up the investment it continues to make in new music and new talent, boasting that UK record labels and music publishers invested nearly half a billion in 2014.
According to figures from the record industry and music publishing sector’s trade groups – so BPI and MPA respectively – labels invested £178 million into A&R in 2014 and an additional £157.4 million into the marketing and promotion of their recordings, while publishers invested £162 million into the careers of songwriters and composers. Fans of maths will be pleased to know that that totals £497.4 million.
The BPI says that its members’ A&R spend equates to 25.4% of their annual revenues, the highest A&R investment as a proportion of revenue since the industry started logging such things in 1992. And if A&R is treated as R&D – ie a research and development cost – then that puts the record industry ahead of all sorts of other industries in terms of how much revenue is reinvested in this way, biotech investing 17.4% of revenue into R&D, software 14.8%, pharmaceuticals 13.2% and the automotive industry 5.4%.
The focus on these particular stats is designed, of course, to point out that it’s the music rights side of the wider industry – ie labels and publishers – which continue to pump most investment into new content and, crucially, new talent. And without that investment, it is heavily implied, the £4.1 billion ‘gross value added’ by music to the UK economy – as reported by UK Music last week – just wouldn’t have been possible. So “woo” for the labels and publishers, now give them some tax breaks will ya?
Making the link between his members’ investments and the £4.1 billion figure, BPI boss Geoff Taylor says: “It’s no fluke that 2014 was such an outstanding year for British music. These achievements do not come easily, however, and they reflect the huge A&R and marketing investment by labels as well as the significant risks they undertake in signing new artists – for every global superstar there are, sadly, other acts that aren’t quite able to break through”.
He goes on: “Such A&R investment is typically well ahead of the proportion of revenues that other leading industries such as the biotech, software and automotive sectors spend on their R&D. Alongside the artists themselves, the passion and commitment labels show in unearthing, nurturing and developing the next wave of talent is one of the main reasons our music is the envy of the world right now. It demonstrates the vital role labels play in the music ecosystem in providing venture capital for new music”.
But don’t forget the publishers Geoff, says MPA boss Jane Dyball. Well she didn’t actually say that. However, alluding to the UK Music stats, she did say that “music publishers are at the heart of this success”, which is definitely a reminder. Her members are “supporting songwriters and composers at every stage of their career” she went on, “whether that’s a would-be recording artist just starting out, an international superstar or a jobbing writer”.
She added: “[The publishers’] investment takes many forms: offering advice, finding label deals, securing sync licenses and cover versions and, of course, ensuring that our creators are paid for use of their works. Importantly, these incredible figures also highlight that music publishers, like record labels, make a very substantial annual investment in A&R, further demonstrating the music industry’s colossal contribution to the financial and cultural wealth of the UK”.
