Tuesday, November 13, 2012

The Cost To Break An Artist: $1.4 Million

IFPI logo image from Bobby Owsinski's Music 3.0 blog
A new study by the IFPI shows that 70% of artists still want to be signed to a label because of the marketing support that a label brings, and that there are more than 5,000 artists currently signed to major labels world-wide. What's more, 1 in 4 of those signings are new artists, meaning that fresh talent is still a priority, according to the report.

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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Anonymous said...

Major label advances now are typically 20% of the deal per Lp...although many majors are now only offering single deals with options..videos for new acts are typically 5k for internet promo vids up to 25-30K for broadcast vids. Depending on what radio format (if any)this is where costs can spiral upward..especially at Mainstream Top 40 formats..

Tom Siler said...

can't wait to hear the wonderful new music of their next "broken" artist!


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