Record Labels' A&R and Marketing Investment Reaches $5.8 Billion in 2017

In a new report from the International Federation of the Phonographic Industry (IFPI), record labels reached a new investment milestone in A&R and marketing around the world.

In 2017, labels invested $5.8 billion.  Breaking that number down, A&R investment reached $4.1 billion, with $1.7 billion invested in marketing in the United States.  This represents 33.6% of global recorded music revenue two years ago.

Looking at how record labels spent the money in 2017, the IFPI writes labels provide artists with:

Resources and people: to bolster a growing team where needed.

Investment: to realize their artistic vision.

Expertise: to engage with marketplaces worldwide.

Relationships: to connect them to other talented artists and creators.

Support: with creating and recording their music.

Global coordination: helping to reach fans worldwide.

Specific segments highlighted in the report include data insights, catalog, non-record income, A&R, business affairs and legal, commercial services, marketing, sync/brand, video production, creative services, publicity, and promotion.

These figures drastically increased from the IFPI’s 2015 findings.  Combined A&R and marketing investment totaled $4.5 billion, or around 27% of global recorded music revenue.

Comparing the music industry’s A&R investment to Research and Development (R&D) in other industries, Francis Moore, the IFPI’s Chief Executive, said the proportion of label revenue spent is “higher than virtually any other industry.”

In today’s dynamic global music ecosystem, the role of the record label as the leading investor in music and partner and collaborator with artists has never been more important.

Whilst artists have a myriad of choices in how to develop their career, a record company offers unique, unmatched support.

The IFPI report also provides case studies of seven artists, including J Balvin, Camila Cabello, and Luis Fonsi.

Speaking about how Epic Records helped establish Cabello as a major artist, the IFPI wrote,

In collaboration with Camila, a comprehensive, global marketing campaign was devised, tying together multiple strands of live TV performances, radio, the creation of unique online content, and brand partnerships.  Together, these elements would create opportunities for fans to engage with Camila across multiple platforms and discover her new music in a variety of exciting and different ways.

You can view the report published in a special microsite here.

 


Featured image by Camila Cabello (YouTube screengrab).