A&R versus R&D: Who spends the biggest dollar?

It isn’t a surprise that record labels are the biggest investors in music. They have been for quite some time. One of the biggest aspects they invest in is A&R (artist and repertoire). Currently, labels spend more than $4.5 billion annually, which is about 27% of their revenues. Labels spend more on A&R than most sectors spend on R&D.  This is mostly because the partnership between artists and labels goes far beyond the financial aspect. Record companies play a big role in the success of the artists by nurturing and allowing them to develop their sounds and craft. According to the data, on average it takes between $500,000 and $2,000,000 to break an artist.

In relation to research and development of some of the other major sectors, pharmaceuticals and biotechnology runs second in intensity at 14.4% where music’s A&R investment sits at 16.9%. The pharmaceuticals and biotechnology industry requires an extensive amount of research as it is extremely important in society and yet the music industry is still spending more on research and development.  We are talking about an industry that reaches about $70 billion in sales of pharmaceuticals a year, supports 4.4 million jobs and added a $1.2 trillion in economic output in 2015.

Here is a look at some of the other sectors and how much they are spending in research in development.