Page last updated at 14:47 GMT, Tuesday, 9 March 2010

Music stars 'still need labels'

By Ian Youngs
Music reporter, BBC News

Pixie Lott
Pixie Lott was one of the major record labels' success stories of 2009

Record labels have put the case for why they are still essential in the digital age.

Global music industry body the IFPI said it wanted to counter the "myth" that artists can make it on their own.

In a report, it said virtually no new artists had broken through without the backing of a record label.

Major labels invest $1m (£670,000) in each new act, who could not afford to make records and videos and go on tour without that backing, the IFPI said.

Record labels around the world spend a total of $5bn (£3.3bn) a year on developing and promoting new and established artists.

IFPI (International Federation of the Phonographic Industry) chief executive John Kennedy said attempting to forge a career online, competing with millions of other acts on MySpace, was like "screaming in space".

"There's not really any evidence of anybody succeeding having gone direct," he said.

Artist's advance - $200,000
Recording - $200,000
Making three videos - $200,000
Touring - $100,000
Promotion and marketing - $300,000
Source: IFPI

"Even artists who are typically described as having broken from the internet like Arctic Monkeys, Lily Allen or Sandi Thom all ended up combining with a conventional record label."

Those artists all garnered early attention on the internet but did not achieve mainstream success until they signed record deals.

Others, such as Radiohead, Dizzee Rascal and Simply Red, have all struck out on their own - but only after building up their careers with labels.

The IFPI's estimated $1m budget to launch a new star, described as "very conservative", includes the artist's advance and fees for recording an album, filming three videos and promoting the releases.

If that artist is successful, much of that outlay will be deducted from their royalties. But label executives point out that they take the risk and recoup their investment in fewer than one in five cases.

We're starting to see artists emerging that are selling out venues without the involvement of a major record label
Jeremy Silver
Featured Artists' Coalition

Columbia Records boss Mike Smith, who signed acts like The Ting Tings and Mark Ronson, said: "Behind every record that you buy, a record company's been putting often millions of pounds into getting that record to them, and to help an artist realise a creative vision.

"I wish there were other people investing the kind of money and expertise that we do into new artists, but unfortunately that just isn't happening."

But Jeremy Silver, chief executive of the Featured Artists' Coalition lobby group, said labels were signing fewer artists than ever because budgets have gone down, and artists were beginning to be able to make a living without them.

"The combination of touring, playing live and working online is really starting to make a difference," he said.

"Increasingly we're starting to see artists emerging that are selling out venues without having had any mainstream exposure whatsoever and without the involvement of a major record label, but having developed fan communities online who know about them.

"They indicate a future opportunity for a much more varied set of approaches for building a career as a musician."

Print Sponsor

EMI reports 1.75bn annual loss
04 Feb 10 |  Business
Shrewd stars make music add up
28 Jan 10 |  Entertainment
Radiohead star in money warning
24 Jan 10 |  Entertainment
The golden age of infinite music
30 Oct 09 |  Entertainment
Music stars call for more power
12 Mar 09 |  Entertainment

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific