Record labels invested $5.8 billion in A&R and marketing worldwide in 2017, a new report released by the International Federation of the Phonographic Industry (IFPI) finds. That figure includes a total A&R investment of $4.1 billion and $1.7 billion in marketing costs, equating to approximately 33.8% of global recorded music revenues.
These figures represent a significant increase over 2015, when IFPI calculated the combined A&R and marketing investment at $4.5 billion, representing 27% of revenues at that time. The figure in 2013 was $4.3 billion.
IFPI has set up a dedicated microsite breaking down the 2017 figures.
“Record labels are trusted partners, collaborators and a driving force helping artists to achieve their creative vision and commercial success,” said IFPI chief executive Frances Moore in a statement. “As today’s announcement makes clear, they are also the leading investors in music.”
IFPI compares A&R to Research and Development (R&D) in other industries, saying that the proportion of record company revenue invested in that area is “higher than virtually any other industry.” That comparison is based on figures included in the 2017 EU Industrial R&D Investment Scoreboard, which calculates R&D investments in the auto, biotechnology and aerospace and defense sectors, among others.
This year’s IFPI report includes case studies of artists including Aya Nakamura, J Balvin and Camila Cabello. It additionally breaks down the various ways a record label develops an artist, including in the areas of publicity, creative services, data insights and video production.
“In today’s competitive music market, the role of a record company has never been more relevant,” continued Moore. “Whilst artists have a myriad of choices in how to develop their career, a record company offers unique, unmatched support.”