Labels spend $1 million dollars to break a new artist

The music industry’s revenue has continued to decline over the last decade. So why is that the major labels are still spending as much as 16 percent of revenue on artist and repertoire while cutting spending in other areas? That’s about to $2.7 billion of global recorded revenues. That’s said to be more than any other industry is spending in this gloomy economy. 

Marketing tactics have changed such as digital and social media while they’re still reaching the same audiences. Revenue has become heavily dependent on merchandising, licensing of music for TV, film and gaming. Artist and repertoire spending has dropped only 3.6 percent since 2008 even though the industry’s value had fallen16 percent says Kristen Schweizer ofBloomberg.com.

The survey below shows that more than 70 percent of unsigned artist still want a record deal. Marketing and promotional support appears to be the leading reason artist want to be signed. That's understandably so with the cost of break your average artist as high as $1.4 million. Independent artist can't afford to spend a fraction of that on marketing their projects. So its up to their management team to creatively get their projects to the next level using minimal resources. 

IFPI: Two new surveys, conducted in the UK and Germany in 2012, show more than 70 per cent of unsigned acts want a record deal, with marketing leading the perceived benefits of record company support.

The Unsigned Guide survey (UK)

	Yes	No
Is your aim to be signed by a record company?	71%	29%
Do you think having a record deal is an important step in developing a successful career as an artist?	75%	25%
What do you see as the benefits of having the support of a record label?
Getting upfront financial support in the form of an advance	35%
Marketing and promotional support	76%
Getting advice from teams of experienced professionals	24%
Creative input and guidance	5%
Support for touring and live performances	46%
Professional video production	3%
Help in partnering with potential brand partners	6%
International expertise and the ability to get to a global audience	31%
Making contacts with producers, songwriters and other potential partners	13%
Handling the business and admin, leaving you to the creative work	26%
Contacts with TV and radio stations	20%
Other reasons	3%

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BVMI study (Germany)

	Yes	No
Is your aim to be signed by a record company?	80%	20%
Do you think having a record deal is an important step in developing a successful career as an artist?	65%	35%
What do you see as the benefits of having the support of a record label?	Very important / quite important	Very important
Support with marketing and promotion	95%	71%
TV and radio contacts	90%	58%
The opportunity to focus on the creative process	82%	50%
Support with tour planning and live concerts	81%	46%
Financial support through payment of an advance	80%	45%