Hang on… is the A&R hit rate of UK major labels just 5.7%?

Yesterday we learnt that the three major labels in the UK signed 156 new artist deals in 2014.

This was a significant rise on the equivalent number a year before, according to the BPI, up 30% on the 120 signed in 2013.

In fact, it was the highest since 2009, when 164 new deals were signed (presumably across four major labels; EMI still existed back then).

That sounds very impressive, obviously.

But, as with most dazzling stats, it all depends how you slice the numbers.

Consider this: Nine debut artist albums reached gold (100,000 sales) status in the UK in the last calendar year.

Not a bad tally, considering this year’s gold-selling UK haul is just three albums – with a few weeks left to run.

2014’s gold-selling crop included megastar Sam Smith, whose debut LP In The Lonely Hour (pictured) smashed past 1.25m UK sales in 2014 alone.

There were also gold first-time efforts from George Ezra (650k+), Ella Henderson (250k+) and Royal Blood (220k+), the Vamps (220k+), 5 Seconds Of Summer (190k+), Collabro (150k+), Sam Bailey (150k+) and Clean Bandit (100k+).

All were released on major labels.

As a percentage of those 156 new artist deals? These nine acts make up just 5.7%.

If the record industry sees ‘breaking’ an artist as selling platinum (300,000) – ie. just Sam Smith and George Ezra – that percentage falls to just 1.28%.

(Worth noting that debut albums from the likes of Catfish & The Bottlemen have since climbed above gold-selling status despite originally being released in 2014, while Hozier has topped platinum. The above figures relate strictly to sales within the calendar year.)

The BPI also reveals that 120 new artist deals were signed in 2013.

That was a year when the gold-selling, UK-sourced debut albums came from Bastille (470k+), Rudimental (370k+), James Arthur (220k+), London Grammar (210k+), Tom Odell (210k+), Disclosure (200k+), Richard & Adam (160k+), John Newman (150k+), The 1975 (130k+), Kodaline (130k+), Gabrielle Aplin (120k+) and Haim (110k+).

London Grammar are signed to an independent – Ministry Of Sound. So the artists behind 2013’s 11 major-signed gold albums would have made up 9.17% of the 120 new signings that year.

Again, there are just two platinum-sellers there – Bastille and Rudimental – which equates to 1.7% of that 120 new artist signings stat.

Meanwhile, the BPI says that £178m was spent on A&R in 2014.

It is more difficult to derive accurate conclusions from this monetary figure, as there’s no way of knowing how much of the cash went on new artists alone – rather than re-signed deals, advances to catalogue acts etc.

But for argument’s sake, if it was all spent on those 156 new acts last year, an average of £1.14m would have been spent on each artist.

The BPI tells us that UK record companies spent a more modest £149m on A&R in 2013.

Across that year’s 120 new artist deals, that works out at £1.24m per act.

[Update: Sources at the majors tell MBW the real average A&R spend figure is closer to £300,000 – £500,000 for a new act, although this can rise anywhere up to £1m for a competitive signing.]

There are a couple of further factors that need to be considered here.

First of all, at the bottom of the release announcing the BPI stats, we get a clearer picture of what ‘A&R’ actually means in this context. And it’s not just signing an act and making a record.

‘Artist advances are the most significant part of label A&R expenditure (averaging 50% of the total in the last three years), representing amounts payable to artists typically on signature or delivery of master recordings. Such advances in part represent income to the artist but they are also necessary to meet the many costs associated with creating new recordings.  Other A&R costs include Recording & Origination, Video costs and tour support.’

Secondly, we have no idea how many of 2014’s 156 new artist deals actually resulted in album releases. Or if albums which did emerge bubbled up in the same year the acts were signed. (Some contracts may have been deliberate development deals, or one/two-single deals, for example.)

Still, these figures are a useful illustration of how many of these artists go on (and don’t go on) to gold/platinum albums success.

Some might believe that it’s more realistic to suggest that new label signings tend to issue their debut album the year after they put pen to paper on a deal…

As mentioned yesterday, so far in 2015 there’s been three new artist albums in the UK that have hit gold: James Bay’s The Chaos & The Calm, Jess Glynne’s I Cry When I Laugh and Years & Years’ Communion.

Of those, only James Bay has gone platinum.

As a percentage of 2014’s 156 new artist signings, the lone singer/songwriter would represent a wince-worthy 0.64%.Music Business Worldwide

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