December 7, 2016
Making music requires a lot of spending.
Record labels invested an estimated $4.5 billion in marketing and developing talent in 2015, according to a new report from IFPI.
The industry’s $4.5 billion investment last year increased from $4.3 billion in 2014.
The report, “Investing in Music,” illustrates that developing talent has never been cheap. In fact, the $4.5 billion that labels spent in 2015 represented a striking 27 percent of industry revenue, according to the report. That makes record labels the music industry’s largest investors.
Of the $4.5 billion in costs, labels spent $2.8 billion on artists and repertoire (A&R) and $1.7 billion on marketing and promotional efforts.
That demonstrates the commitment labels have in their artists, IFPI Chief Executive Frances Moore and Worldwide Independent Network CEO Alison Wenham said.
“Investing in Music highlights not just record companies’ financial investment in artists, but also the enduring value they bring to artists’ careers,” they said in a joint statement. “In the digital world, the nature of their work has evolved, but their core mission remains the same: discovering and breaking new artists, building their careers and bringing the best new music to fans. These are the defining qualities of record companies’ investment in music,” Moore and Wenham said in a joint statement.
IFPI wrote the report in association with the Worldwide Independent Network, which represents independent labels.
Read the full report here.