How Much do Record Labels Spend on Marketing their Artists?

May 8, 2019 | Music Business

Whether you’re getting signed to a major record label or independent record label, breaking a new artist can be a costly business.

Unless you’re an independent artist who has already established a solid fanbase and you’re partnering up with a label for additional resources and distribution, chances are it’s going to cost them a fair chunk of money to promote you to new listeners and build a fanbase from the ground up.

In a study published by the IFPI (International Federation of the Phonographic Industry), it was highlighted that over $5.8 billion is invested per year in A&R and marketing by record labels.

Their study concluded that it can cost between US$500,000 and US$2,000,000 to break an artist in a major recorded music market. These costs were broken down into:

Advance $50,000-$350,000

In most cases, record labels will pay advances to artists so that the talent can focus on their creative tasks – e.g. songwriting, recording, performing. However, advances aren’t free money, think of them as a loan since they are recoup-able against future royalties from music sales and streaming revenue.

Recording $150,000-$500,000

Depending on the project, recording sessions can potentially run up a pretty significant bill, especially if you’re working with a number of musicians and high profile producers.

Video production $50,000-$300,000

In this day and age, the visuals are just important as the music. With video playing a huge role in social media networks like Facebook, Instagram and Snapchat, it’s crucial for artists to capitalise on the medium to showcase their music to a wider audience. Costs can vary depending on the quality of the videos as well as the amount of music videos shot for an album.

Tour support $50,000-$150,000

There’s a lot of work that goes into planning and executing a successful tour, especially if it’s global. Just off top, you’ll need to book and promote the tour dates, secure endorsement deals and sponsorship, hire a team to accompany the tour, put together merchandise to sell on tour, and plenty more.

Marketing & promotion $200,000-$700,000

Even though we’re living in a primarily digital age, where advertising on websites and social media can significantly drive down marketing costs, record labels are still prone to booking offline ad spots. This can include billboards, TV, radio, magazine ads in addition to PR and publicity work done for the artist.

Total $500,000-$2,000,000

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