That people still don’t deem music a highly capital-intensive industry is actually funny

Re: this report by IFPI in 2013, Labels spend as much as 15.6% of their revenue on artist development - a higher % than what other investment-heavy sectors like tech, software, healthcare...

aerospace and pharmaceutical industries spend on R&D.

Going by a percentage of its overall annual revenue, music companies spend a significant amount annually on scouting and developing talents.

IFPI updated this figure to 16.9% in 2015 and 33.8% in 2017.

According to the report, as at 2017, a total of $5.8bn is invested in A&R and marketing/promo annually - $4.1bn and $1.7bn respectively; meaning A&R spend was equivalent to 23.8% of overall industry revenue.

PS: A&R in this case constitutes total artist expenditure - ie it includes advances paid in order to sign acts, and some advance royalty handed over to new talents.