The Cost Of Breaking A Major Label Act

The latest IFPI (International Federation of the Phonograph Industry - boy, is that name outdated) recently came out with a report about the state of the music industry and a few of the elements that were analyzed included how much the major labels spent on developing new acts.

Here are some interesting figures.

• The cost of breaking an act is between $500k and $1 million.

• The typical advance averages between $50k and $350k

• Typical album recording costs are between $150k and $500k.

• The typical video production goes from between $50k to $300k.

• Tour support is between $50k and $150k.

• Typical marketing and promotional costs are between $200k to $700k.

Major labels spent $4.6 billion dollars this year on A&R and marketing their acts, and 27% of the major label's revenue went to A&R. According to the IFPI, this is greater than what the computer, pharmacology and biology industries spend on R&D.

Finally, there are 7,500 artists signed to major labels around the world. One in 5 is a new signing.

Most artists today really like the DIY aspect of building their career, but there's nothing like the monetary clout of a large label.

----------------------------------

Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Major Label Costs To Break An Artist

Here's an infographic by the International Federation Of The Phonograph Industry and brought to my attention by Digital Music News, which is the world-wide trade group for record labels. Keep in mind a number of things when you read it:

1) We're talking about a major label making this kind of investment.

2) Although for a new artist this was somewhat common even 10 years ago, an expenditure like this is more the exception than the rule.

3) If I were artist X or artist Y, I'd probably say, give me a small fund and a higher royalty rate, and let me pay for as much as I can myself, including promotion. There's a lot of money going to waste.

4) This is why the major labels are in the state they're in today.

----------------------------------

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.