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Why Being Signed To A Music Label Rocks

March 31, 2011

A new survey released by ReverbNation and Digital Music News this week revealed that three out of four unsigned music acts today would prefer NOT to be (unsigned that is).  That equates to a sweeping 75 percent of the near 2,000 artists surveyed across varied pop, rock, alternative and hip hop genres – all aspiring for a record deal.  What's more, the bands surveyed leaned heavily towards being signed to a major music label specifically.

While the findings may not come as a surprise to some, the confirmation that artists themselves recognize the value of a successful label-artist partnership is a notable one.

So why would an act want to be signed by a music label today?  For starters, the investment associated with developing new talent is substantial.  IFPI estimates that music companies internationally invested $4.8 billion in discovering, nurturing and marketing artists in 2010.  Record labels today invest an average $1 million to break a new pop act in a major market.  That investment supports a variety of production and promotional pursuits that most individual artists would never be able to afford on their own, including advances, recording time, music video creation, tour support and marketing. 

In a world where there are 2.5 million hip-hop and 1.8 million rock acts on MySpace alone, more often than not, the addition of a music label is usually the difference between a band that offers songs to a few devoted fans online, and one who embarks on a multi-city tour, whose music is featured on a hit TV show or commercial and who goes on to earn Gold and Platinum plaques. In a noisy digital music market, it takes a label to help acts stand out in the crowd.

And with investment comes a need for returns.  Music labels provide the financial and human resources to help artists achieve their dreams.  We, alongside the broader music and tech community, have worked to build a thriving digital music marketplace that boasts 400 legal services worldwide offering 13 million tracks.  But fans have a role to play too.  Choosing legal music services that compensate creators enables music companies to continue to invest in new artists and give talented bands new opportunities.  That’s the bright future of music we see.

For more details on music labels’ important role in developing tomorrow’s bands check out the IFPI’s Investing In Music report

Liz Kennedy, Deputy Director, Communications, RIAA