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Label Investments Remain Strong

LABELS STILL SPEND MONEY: Record companies’ total investment in A&R and marketing still tops $4.5 billion annually, according to international music trade org IFPI’s Investing in Music report, released this morning. Label A&R spending is pegged at $2.7 billion of that total, representing 16% of global recorded music revenues. Revenues invested in A&R increased from 15 to 16% of industry revenue between 2008 and 2011, a greater proportion than most other sectors contribute to product research and development. Other factoids from the report: There are more than 5,000 artists signed to major labels’ rosters, with tens of thousands more signed by independent labels, with 70% wanting a major label deal.  One in four artists on labels’ rosters is a new signing.  The industry’s marketing spending is estimated to have declined from $2.4 billion in 2008 to $1.7 billion in 2011. The costs of breaking a major label artist in a major market are estimated to be $1.4 million, including advance ($200k), recording costs ($200-300k), video production ($50-300k), tour support ($100k) and marketing/promotional costs ($200-500k).  Synch income is now at $342 million globally.  Domestic repertoire accounts for the majority of the Top 100 physical format album sales in all the industry’s major markets: U.S. (62%), Japan (77%), Germany (55%), UK (53%) and France (54%).  Executive believe the industry will expand beyond the 10 countries, where it currently makes 80% of its revenues, into new markets such as Brazil, China, India and Russia. To download a copy of the full report, click here. (11/12p)

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