If you donâ€™t have half-a-million dollars, then maybe you should go home. Â According to aÂ study released this morning by major label organization IFPI, breaking an artistÂ in a major market requires at least $500,000, and sometimes as much as $2 million.
Overall, the IFPI counted $4.3 billion in upfront talent-scouting and marketing costs coming from labels last year alone, with virtuallyÂ zero upfront investment coming fromÂ Spotify, iTunes, Google, or SoundCloud. Â â€œRecord companies remain the largest upfront investors in artistsâ€™ careers,â€ the IFPI noted. Â â€œCommon features of contracts signed with emerging artists include the payment of advances, recording costs, tour support, video production and marketing and promotion costs.â€
It was also noted that signed artists arenâ€™t taking much financial risk, either. Â â€œThese upfront payments are recoupable against royalties generated from the recorded music created, but in many cases artists do not break even and do not have to repay the money.â€