UK record labels' investment in talent and new music doubles over past five years

11 August 2022 - Press release

 

• UK record labels invested almost £500 million in 2021, building artists' careers and boosting music exports through A&R, marketing and promotion – more than double 2016 investment levels

• Labels' A&R spending grew nearly two-and-a-half times faster than their revenue over the past five years. Combined with marketing spend, this represented nearly 40% of total label revenues last year 

• UK labels are supporting a vast and diverse array of new artistic talent across all genres, including Arlo Parks, Glass Animals, Griff, Tom Grennan and Wolf Alice

 

UK record labels invested £494.8 million supporting artists' careers and development in 2021 through A&R, marketing and promotion – more than double their investment in 2016, according to new figures released by the BPI, the representative voice for independent and major record labels across the UK.

The labels' investment last year included a record £358.1 million spend on A&R and another £136.7 million on marketing and promotion, which covers areas such as advertising, digital marketing, publicity, and radio and playlist promotion. The investment represents 39.2% of total UK label revenue.

The A&R spend, which includes artist advances, creating new recordings, video costs and tour support, was106.6% more in 2021 than the amount invested in 2016 (£173.3 million). Over the same five-year period to 2021, UK labels' total revenue income increased by 42.9%, driven largely by a 51.3% surge in streaming revenue. This means labels' A&R spending grew at nearly two-and-a-half times the rate of their revenue rises, and that the labels' A&R investment represented 28.4% of their total revenues.

In addition to these investments, labels also invested significantly in the creation and maintenance of the IT and data infrastructure that is now such an essential component of global marketing and promotion.

The almost half a billion pound annual investment record labels make in A&R and artist marketing is crucial in enabling them to discover, sign, develop and break new artists, create new music, fund and provide artistic and creative support and direction, organise tour support and provide other supporting services such as marketing, promotion and PR. This investment has been instrumental in developing the international careers of British talent such as Arlo Parks, Dua Lipa, George Ezra, Glass Animals, Griff, Joel Corry, Joy Crookes, Lewis Capaldi, Mabel, PinkPantheress, Rag'n'Bone Man, Sam Fender, Tom Grennan and Wolf Alice, to name just a few. Recent BPI research highlighted this talent pipeline is coming from across the nations and regions of the UK with nearly two-thirds of the past year's most successful UK albums having been recorded by solo artists and groups from outside London. A&R, however, is a highly risky and speculative business and only a minority of artists signed to labels become commercially successful.

The high levels of investment injected by British labels have helped to make the UK the world's greatest music exporter after the US, a status underpinned by the demand for British music on streaming services around the world, in particular music from new  artists. More than 120 UK artists whose debut albums were released since 2015 each amassed more than 100 million global audio streams last year, according to BPI analysis of data from Luminate (formerly MRC Data). This represents nearly one-third of all the artists from the UK who attained this level of streaming success in 2021.

The dramatic increase in record label investment comes against the backdrop of intensifying competition for music fans' attention, with tens of thousands of tracks being uploaded to streaming services every single day to add to the millions of songs already available. Artists from regions and territories such as Latin America and South Korea are accounting for an increased proportion of the global charts, while competition from established music markets such as the US, Canada and Australia remains strong. In this environment, many artists value having the support and investment of a record label to help them find commercial success in the UK and around the world.

Geoff Taylor, Chief Executive BPI, BRIT Awards & Mercury Prize, said:

"The UK has been one of the world's music superpowers since the advent of pop culture, thanks to the combination of our many incredible artists drawn from all regions and nations, and the passion, financial backing and expertise of our record labels. During a time when music has returned to growth after years of decline, labels have continued to prioritise investment in artists. Spending on A&R reached a record £358 million last year and is significantly outpacing revenue increases. It is fuelling success for a new generation of UK artists who are embracing the opportunities of this truly connected world,  underpinning our leading position on the global music stage."