Record Labels Invest $4.5 Billion Annually In Artists… Pirates, $0… Any Questions?

So record labels invest in the careers of artists about $4.5 Billion annually in A&R and Marketing. Meanwhile, there are 200,000 infringing sites exploiting artists work and paying them nothing that we can see from the looks of the Google transparency report.

To be precise at the time of the writing of this post there are 281,340 infringing sites on the report with the #1 offender having received over 7.5 Million DMCA takedown notices! Seriously, 7.5 Million… and Google can’t determine that this is a site “dedicated or primarily used for infringement.” Wow.


Now look, we don’t always like record labels, but when we do, it’s because they are actually paying artists and investing capital into developing careers (hello Trent Reznor returning to a major label). Ninety percent of new releases financed by labels don’t recoup or break even, but the bands still gain the marketing and PR benefit from the labels investment after the deal ends (hello Thom Yorke and Radiohead).


Any wrong doing should be unacceptable. We’ve heard far to many stories of artists being exploited by record labels, publishers, managers, booking agents, concert promoters and a wide range of those offering services from radio promotion to independent PR and marketing. If anything, the internet has added to this list a whole new group of opportunists including the ad tech industry, pirate sites, cyber lockers and more.

So yes, any wrong doing against artists and creators should be unacceptable, even if it happens online.

So here’s some quick notes from the report published by the IFPI:

* Record companies’ total investment in A&R and marketing tops US$4.5 billion annually according to IFPI’s Investing in Music report

* Labels have maintained A&R spending at US$2.7 billion, representing 16 per cent of global recorded music revenues, despite the economic recession

* US$1 million to break a new artist in major markets

* More than 70 per cent of unsigned artists would like a recording contract according to two new surveys

Record companies remain the primary investors in artists, maintaining A&R spend despite declining overall revenues in recent years. Labels spent US$2.7 billion in 2011, only marginally down on 2008 (US$2.8 billion), despite an overall decline of 16 per cent in the trade value of the industry globally over the same period. Revenues invested in A&R increased from 15 to 16 per cent of industry turnover between 2008 and 2011.

Music companies invest a greater proportion of their global revenues in A&R than most other sectors do in research and development (R&D). Comparisons show music industry investment exceeding that of industries including software and computing (9.6%) and the pharmaceutical and biotech sector (15.3%). The comparisons are based on the European Commission’s 2011 EU Industrial R&D Investment Scoreboard.

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.

Ok, then you have this… those who pay nothing, invest nothing, and pocket everything for themselves… this is the future you want? When artists complain about tiny payments from Spotify it’s important to note the reason why they can get away with paying so little, is because of all of those who pay nothing at all.

200kinfringingsitesAnd most of this is financed by Fortune 500 Companies flowing money through online ad networks like Google and others. The situation has even gained the attention of The White House, although we’ll see what good it does.

So if you want to get paid, focus on removing the bad actors from the marketplace and restoring fairness. Our hope has always been that the internet would in fact create a new middle class of professional musicians, by the means of their own choice. Unfortunately what we’ve seen is just more exploitation.

7 thoughts on “Record Labels Invest $4.5 Billion Annually In Artists… Pirates, $0… Any Questions?

  1. Yes, good to see this in-depth coverage out in the open and at the core of the piracy, content wants to be free BS.

    While those who promote piracy as their right and point to the greed of record labels as a justification, they totally bypass the fact that pirate sites are for-profit entities, contributing nothing to the artists.

    They go so far as to defend rich robber barons like Kim Dotcom, while trashing the entertainment industry. It only makes sense if your true motivation is to take advantage of an Open Source environment and feel righteous about it.

  2. File sharers spend between 30 and 35% more than the general internet population on music and film. Is that really $0? I don’t think so.

    How much of the “$4.5 billion” goes to artists? How many artists get that money? Very, very few.

    It’s time to bring artists and file sharers together. The reason the MPAA doesn’t like that idea is because they know it will mean money goes to the artists rather than the executives and lawyers. That’s a good thing, not a bad thing.

    1. Sorry Tom. Not only is that stat bonk (based on survey’s given to Norwegian pirating college students) but you are missing the point being made. Please tell us how much money the companies listed in the screen cap of the Google transparency report have paid artists, ever? That would be zero we’re pretty sure – but if you’ve got data to the contrary we’d like to see it.

      These are illegally operating, infringing businesses supported by advertising revenue originating with fortune 500 companies, flowing through google and other online ad networks and paying creators nothing. So please get the facts straight.

      The 1999 tech lobby handbook talking points are getting a bit thin. If you want to do something for artists, start by focusing on getting them paid.

  3. And we have Pinterest doing the same for the visual media: photography, painting, graphics, calligraphy. ALL self-publishing, independent artists are at the mercy of large venture capital corporations exploiting their intellectual property illegally.

    I used the term “crowdscraper” to describe websites that provide a copyright infringement platform, enlisting humans to infringe on their behalf, rewarding them with digital catnip such as “likes,” “repins” and “followers.”.

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