Last week I bought a huge report on the music industry, this report cost me $2000,00. Yes that is a huge chunk of change out of my pocket. Very interesting report, with great insight into the music recording industry. I will share my thoughts on this as I read through this report.
Real quick though, it is stated that record companies reinvest 30% of their revenues back into current artists, to develop and market them. It is also stated that the record companies spend the most money on R&D (Research and Development) than any other industry.
R&D for the music industry is redefined as A&R (Arts & Repertoire). Record companies spend 15% of revenues to find, research and develop new artists.
These figures are based on the major record companies, not Indie record companies.
On average there is a cost of $1 million just to break a new artist into major markets, there is a whole huge break down of the costs, I’ll post on at another time.
Marketing is the biggest expense of all to record companies and artists, as the costs are recoupable against the artist, but if the artists does not sell, the record company is losing the money invested.
Just some food for thought, will come back soon, as I go through the report.
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