The Investing In Music report goes on to say that record labels spend about $4.5 billion annually in A&R, and this a greater percentage of revenue than other industries like computing, pharmaceutical or biotech.
But perhaps the most interesting bit was the fact that the average cost to break an artist was $1.4 million in the US. This was broken down in $200k for an advance, $200 to 300k for recording costs, $50-300k for video production costs, $100k for tour support and $200-500k for marketing and promotional costs.
Those numbers are obviously not for the average record label signing, and it's hard to believe that they're even an average. I guess I don't get to work in the rarified air of a major artist enough any more, but there aren't many artists that I know of that are getting a $200k advance or a recording budget of $200k. And didn't the days of paying $50k+ for a video went away when MTV decided they were better off programming reality shows instead of music videos? And tour support.........that vanished so long ago that most artists consider it a myth.
Once again, if you're talking about a star artist trying to break into superstar level, these numbers might be realistic, but to make it seem like they're average costs makes everyone believe that we're still living in the 1980s.
There are some other interesting figures in the report, some of which you might want to take with a grain of salt. Remember, the IFPI represents the world's record labels, and what they publish is biased accordingly.
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