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Labels reinvest over a quarter of revenues in artists, report finds

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Record companies remain the largest investors in music, providing more than US$4.5bn (£3.6bn) for Artists and Repertoire (A&R) and marketing in 2015, according to a new report.

The Investing in Music report, published by the IFPI, details record companies’ global investment in discovering, nurturing and promoting artists and their music.

It states that record companies invest 27 percent of revenues back into supporting artists, with $2.8bn (16.9 percent of total revenues) going on A&R and $1.7bn on marketing and promotional campaigns.

This is a higher proportion than the equivalent research and development (R&D) investment ratio of all the leading sectors included in EU Industrial R&D Investment Scoreboard 2015.

A major international signing will cost between $500,000 and $2m to break in a major market such as the US or UK – including investment in everything from artist advances to recording costs, videos, tour support, and marketing and promotion.

Music companies also invest, along with distributors, in developing the infrastructure of the digital market, servicing more than 360 digital music sites globally with more than 40 million tracks.

Jointly introducing the report, Frances Moore, chief executive of IFPI and Alison Wenham, chief executive of WIN, said: ‘Investing in Music highlights not just record companies’ financial investment in artists, but also the enduring value they bring to artists’ careers.

‘In the digital world, the nature of their work has evolved, but their core mission remains the same: discovering and breaking new artists, building their careers and bringing the best new music to fans. These are the defining qualities of record companies’ investment in music.’

The IFPI represents the recording industry worldwide, while WIN (World Independent Network), represents independent labels internationally.

Visit the microsite and read the full report.

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