Remake, Remodel: The Evolution Of The Record Label

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Alternative investment routes are valid, but if you want a chart career, you almost
always need a label.
Artist manager Gary McClarnan described himself as more and more acting as an angel
investor in artist brands, but he feels the involvement of labels is nevertheless still key.
‘You hear at conferences that there is no need for record labels,’ he said. ‘That is just
a stupid viewpoint. It’s about having a talented, co-ordinated, focused and
enthusiastic team to make something happen; manager, label, publisher, agents
and publicists.’
However, most parties that were interviewed for this report stressed that by far the
leading source of investment in recording artists is from record labels.
Total A&R spend by record labels in the UK in 2009 was estimated at around 23 per cent
of industry revenue according to BPI research 17 .
With the sales line of the recorded sector under threat, this also puts pressure on the
labels’ ability to sustain the level of investment. There is a perception that labels are
investing in fewer new artists in the last couple of years.
One senior major label executive said, ‘It’s harder and we are taking less bets, but they
are more focused bets.’
If this strategy is working, we should expect to see the success rate for artists signed
going up. Years ago, major labels were criticised for throwing as many acts as possible at
the wall and seeing what sticks. Evidently, today that method no longer works – if it ever
did.
Emma Banks would appear to support that strategy. ‘There is too much mediocrity
about,’ she says. ‘There was and still is a way of thinking which says, “Let’s sign it and it
might work.” Today, signing anything because it “might work” is not a clever thing to do.’
But at the same time that labels are signing fewer artists, they are signing them for more
areas of their business. The move towards 360-degree deals was looked at in more
detail in Chapter 2, but it suffices to say that this spreading of investment across many
rights is going hand-in-hand with a sharpening of focus on fewer artists.
At a time when sales of recorded music continue to decline, it is important to diversify
where your income comes from. Even in countries where the recorded music market has
collapsed, labels ‘can make back our investment through sales of tickets and
merchandising,’ according to Shabs Jobanputra.
He says he prefers deals which involve investing across the whole of an act’s business
and incentivising overseas licensees across all the revenue and profit areas. ‘This way,’
he says, ‘even if certain recorded music markets are moribund, there is still money to be
made.’
17 BPI Surveys
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