New figures released by the BPI reveal that UK record labels invested £494.8 million in artists’ career development in 2021, more than double the amount spent in 2016.
The labels’ investment last year included a record £358.1 million spend on A&R and another £136.7 million on marketing and promotion, and together represents 39.2 percent of total UK label revenue. The A&R spend, which includes artist advances, creating new recordings, video costs and tour support, was 106.6 percent 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 percent, driven largely by a 51.3 percent 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 percent of their total revenues.
The investment record labels make in A&R and artist marketing is crucial in enabling them to discover and develop new artists, create new music, and fund and provide support and direction, among many other areas. 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 and Mercury Prize, says: ‘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.’