Are labels – especially major labels – critical financiers of musical creativity? That is a tough thesis to defend these days, especially against a backdrop of surging music supply and consumption among unsigned artists. But record labels have played a major filtering and financing role in the past, and their pocketbooks have created some of the biggest superstars of modern music history – starting at the stage of obscurity.
But just how much investment is happening today? The IFPI just released a report pegging current label investment at $5 billion annually, worldwide. That is roughly 30 percent of broader revenues, a serious reinvestment on early-stage artist development and marketing. On top of that, the IFPI estimates that labels commit more than $1 million to break artists into newer markets. Money for advances, recordings, marketing and promotional activities are the largest expenses, often tipping hundreds-of-thousands of dollars, according to the group.
The findings are part of the just-published Investing in Music report. The broader agenda is to promote anti-piracy measures, reaffirm the importance of labels to artists, and convince lawmakers that labels play an important role in the economy and culture. “No other party comes close to the levels of investment committed by record companies to developing, nurturing and promoting talent,” said IFPI chief John Kennedy.
But other parties are also starting to fill that role. As the hype surrounding ‘DIY’ dies down, artists are realizing that teams and financial support are important for growth, though the partner itself can vary. Indeed, labels are not the only ones capable of bankrolling talent, and artists have more sidekick options than ever before.
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Tags: International Federation of the Phonographic Industry, Investment, Marketing, Music, Music Industry, Record label
